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UK firms report slide in activity due to Iran war and political turmoil
Services activity fell to its weakest since January 2021 as firms cited higher energy costs, shipping delays and political uncertainty.
- The preliminary Britain Composite Purchasing Managers Index fell to 48.5 in May from 52.6 in April, marking the first reading below the 50.0 growth threshold since April 2025 and signaling a widespread drop in business activity.
- Rising energy costs from the Iran war and political uncertainty regarding British Prime Minister Keir Starmer have eroded corporate confidence, with bills facing the biggest increase in more than three years.
- Activity among services Companies plunged to its lowest level since January 2021, while Manufacturing firms increased prices by the most since July 2022 and scaled back hiring for the 20th consecutive month.
- Chris Williamson, chief business economist at Global Market Intelligence, warned the economy faces a "perfect storm," noting that weakening activity and strong inflation pressures leave the Bank in a quandary.
- Financial markets expect the Bank to raise interest rates twice over the remainder of 2026, though Williamson said the economy is on course to contract by a quarterly 0.2%.
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Starmer Crisis and Iran Shock Combine to Shrink UK Private Sector
(Bloomberg) — British businesses posted the first decline in output in over a year as the Iran shock and a mounting rebellion against Prime Minister Keir Starmer hit activity in the services sector, a survey showed.
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Coverage Details
Total News Sources15
Leaning Left3Leaning Right2Center5Last UpdatedBias Distribution50% Center
Bias Distribution
- 50% of the sources are Center
50% Center
L 30%
C 50%
R 20%
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