Growth slows across UK private sector as job cuts accelerate
The flash figures are based on preliminary data. Any score above 50.0 indicates that activity is growing while any score below means it is contracting.
The figures therefore pointed towards continued growth but at a slower rate.
It was also weaker than expected by economists, who had predicted a reading of 51.8 for the month.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said: The flash UK PMI survey for July shows the economy struggling to expand as we move into the second half of the year.
'The sluggish output growth reported in July reflected headwinds of deteriorating order books, subdued business confidence and rising costs, all of which were widely linked to the ongoing impact of the policy changes announced in last autumn's budget and the broader destabilising effect of geopolitical uncertainty.'
The data showed that growth was driven by the service sector in July, with firms highlighting an 'uptick' in consumer spending.
Nevertheless, service businesses said they still faced headwinds linked to 'fragile domestic economic conditions' and wider uncertainty.
Meanwhile, manufacturing production stabilised during the month after eight consecutive months of decline.
Goods producers however said they were impacted by 'challenging business conditions', particularly in major export markets due to the continued fallout of the US tariff changes.
Surveyed firms reported a drop in overall new work from the private sector, slipping to its weakest level for three months.
Lower levels of new work contributed to another drop in employment, with the survey showing the fastest rate of 'job shedding' since February, with job cuts across the manufacturing and service sectors.
Companies cited that higher labour costs, following rises in national insurance contributions and the minimum wage, led to a number of workforce restructurings.
Mr Williamson said: 'Particularly worrying is the sustained impact of the budget measures on employment.
'Higher staffing costs have exacerbated firms' existing concerns over payroll numbers in the current environment of weak demand, resulting in another month of sharply reduced headcounts in July.'
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