Key facts
- Private sector employment in the UK has decreased for 22 consecutive months.
- The UK's purchasing managers' index (PMI) reached 52.2 in July, signaling economic expansion.
- The current duration of falling employment is a joint record in 30 years of data collection.
- The unemployment rate has increased to 4.9% from 4.4% since the current government took office.
- The pace of job cuts in July was the slowest since October 2025.
- Input price increases have slowed to a five-month low.
Private sector job cuts in the UK have persisted for 22 consecutive months, marking a record duration despite recent indicators suggesting economic growth. The UK's overall purchasing managers' index (PMI) stood at 52.2 in July, above the 50 mark that signifies expansion.
Analysts highlighted the stark contrast between this sustained employment decline and the economic growth figures, drawing comparisons to the Great Financial Crisis and the dot-com bubble crash. Tim Moore, Director at S&P Global, noted that falling staffing numbers continued despite rebounds in activity and new business, stating the current duration of declining employment is a joint record in 30 years of data collection.
Shadow business secretary Andrew Griffith criticized the government's economic policies, attributing the prolonged services sector job losses to the "Employment Rights Act," the "jobs tax," and business rates hikes. Official data indicates the unemployment rate has climbed from 4.4% to 4.9% since the current government was elected, affecting approximately 150,000 more individuals, excluding those who are inactive.
However, the latest month's job cuts represented the softest rate since October 2025. Input price increases also moderated, reaching a five-month low. Economists noted that recent Middle East tensions, which briefly pushed oil prices near $100 per barrel, could impact inflation and household incomes. Martin Beck, Chief Economist at WPI Strategy, suggested that while a temporary boost from the World Cup and favorable weather may have aided some hospitality firms, it might not signal a decisive economic turning point.