In June, the UK's services sector saw modest growth, with business activity reaching a three-month high according to S&P Global's purchasing managers' index. The composite index rose to 50.7, signaling expansion amidst rising taxes, geopolitical tensions, and declining employment. Though there was a slight increase in client demand, employment continued to fall for the ninth month, highlighting a fragile recovery. Economists cautioned that while inflationary pressures eased, overall business confidence remains low and GDP growth projections for the second quarter stand at only 0.1% due to weakened foreign demand and higher labor costs.
UK growth remains disappointingly lacklustre. Second-quarter GDP is now expected to rise just 0.1 per cent, with business confidence subdued compared to a year ago.
Employment continues to be cut as firms navigate a tough environment of higher staffing costs, weaker demand, and mounting global uncertainty.
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