The UK private sector contracted sharply in April, with the flash PMI Composite falling from 51.5 to 48.2, the lowest reading in 29 months. PMI Manufacturing dropped from 45.3 to 44.0, a 20-month low. PMI Services slipped from 52.5 to 48.9, the weakest in 27 months.
According to S&P Global’s Chris Williamson, the downturn marks the steepest fall in output in nearly two and a half years, with data now pointing to a potential quarterly GDP decline of -0.3%.
Also, business sentiment has sunk to its lowest level since late 2021, and even beneath the post-Brexit vote lows. The slump in exports, tied to weak global demand and escalating trade tensions, is adding to domestic burdens. Rising staffing costs—partly due to changes in National Insurance and minimum wage rules—have further squeezed margins.
The sharp contraction and collapsing sentiment pose “red flags” for policymakers and could tip BoE toward cutting rates at its upcoming May meeting.
