‘Damning’ 22 Months of Job Losses in the Service Sector

By the Editorial Team · Thursday, August 6, 2026

The UK services sector saw employment decline for the 22nd consecutive month in July despite modest overall economic growth, with private sector job losses persisting at levels not seen in decades. This ongoing reduction in staffing underscores a complex economic environment where rising business activity has not translated into job creation, raising concerns about government policies and external factors such as the Middle East peace process influencing future labour market stability.

The UK services sector has experienced a sustained decline in employment for the 22nd consecutive month, despite data indicating modest overall economic growth. According to researchers at S&P Global, private sector employment continued to contract in July, marking a prolonged period of job losses uncommon in recent decades.

The latest purchasing managers’ index (PMI) for the UK economy registered a score of 52.2, which signals expansion in business activity since a reading above 50 reflects growth. However, this contrasted with ongoing reductions in staffing levels, highlighting a complex economic landscape where output gains have not translated into increased hiring.

Tim Moore, director at S&P Global, noted that the rebound in business activity and new orders failed to prevent further job cuts, with the duration of declining employment now matching a 30-year record. Analysts have drawn comparisons between this period and employment trends during the 2008 financial crisis and the aftermath of the dotcom bubble, underscoring the unusual persistence of the current slump.

Political reactions to the figures have been notably critical. Shadow Business Secretary Andrew Griffith described the ongoing job losses as "damning," attributing them to recent government policies including the Employment Rights Act, increases in business rates, and job-related taxes. Griffith argued these measures have contributed to the challenging environment for businesses and workers. Official government data indicates that the unemployment rate has risen from 4.4% to 4.9% since Labour took office, representing roughly 150,000 additional unemployed people. These figures do not account for individuals who are inactive in the labour market, such as those engaged in education, retired, or otherwise not seeking employment.

On a more positive note, the pace of job losses appears to be slowing. July’s contraction in employment was the softest recorded since October 2025. Additionally, the rate of increase in input costs among firms responding to the S&P Global survey eased to its lowest level in five months, following a spike in April.

Economists have also highlighted external factors influencing the UK’s economic trajectory, noting that the outcome of the peace process in the Middle East could play a significant role in shaping future growth and labour market conditions.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.