UK Private Sector Activity Shows Signs of Softening

In a recent report released on Monday by S&P Global and the Chartered Institute of Purchasing & Supply (CIPS), it was revealed that the private sector activity in the United Kingdom experienced a slight slowdown in December.

The Composite Output Index saw a minor contraction, decreasing by 0.1 index points from November to settle at 50.4 in December. Conversely, the Services PMI Business Activity Index saw a slight increase, rising by 0.3 index points to 51.1. The report sheds light on the growing challenges faced by the services sector, including hiring freezes and the decision not to replace departing employees due to increasing payroll costs.

Insights from S&P Global Market Intelligence

"The service sector concluded the previous year with only a marginal improvement in business activity and a near halt in incoming new work," stated Tim Moore, Economics Director at S&P Global Market Intelligence. He further elaborated, "A post-Budget decline in business optimism continued into December, with expectations for output growth in the coming year remaining at a 23-month low, unchanged from November."