UK Private Sector Growth Slows Amid Political Uncertainty

By the Editorial Team · Wednesday, June 24, 2026

The UK’s private sector growth fell to a 14-month low in June, with the composite PMI dropping below the 50 threshold, signaling contraction driven by sharp declines in services and weaker manufacturing. This slowdown reflects ongoing political uncertainty following the prime minister's resignation, as businesses await clearer fiscal policies under incoming leadership, potentially prolonging subdued economic activity.

Growth in the United Kingdom’s private sector slowed to a 14-month low in June, reflecting ongoing uncertainty around the country’s political and economic outlook. The flash S&P Global composite purchasing managers’ index (PMI) dropped to 49.4 last month, down from 49.7 in May and below the 50-point mark that separates expansion from contraction. This reading also fell short of analysts’ expectations, which had forecast a modest growth rate of 50.6.

The services sector, a key component of the UK economy, experienced a sharp decline, with its PMI falling to 48.7 in June from 49.3 the previous month. This figure marks the joint-steepest contraction in over five years. Meanwhile, the manufacturing sector also weakened, with its PMI decreasing to 53.1 from 53.9, representing a three-month low though still indicating expansion.

Economists attributed much of the downturn in services activity to diminished demand linked to geopolitical tensions arising from the ongoing conflict in the Middle East. Additionally, the political landscape has contributed to uncertainty among businesses. The resignation of Sir Keir Starmer from the position of prime minister earlier this week has paved the way for Andy Burnham, widely regarded as the prime minister in waiting, to assume office, potentially in early July. However, Burnham has yet to elaborate on his fiscal policies, leaving businesses cautious in their spending and investment decisions.

Chris Williamson, chief business economist at S&P Global Market Intelligence, highlighted the impact of the unstable political environment on business confidence. He noted that unsettled conditions have led to delays in spending, which will need to be addressed to foster a more favorable environment for economic growth. Based on PMI figures, the UK economy appeared on track to contract by 0.1 percent in June, following a similar decline recorded in April.

The current data indicates that until greater clarity emerges regarding government policy, economic activity in the UK’s private sector may remain subdued, with business sentiment and demand continuing to face headwinds.

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.