| Consensus | Consensus Range | Actual | Previous | |
| Composite Index | 51.6 | 51.3 to 51.9 | 48.5 | 52.0 |
| Manufacturing Index | 52.8 | 51.2 to 53.0 | 53.7 | 53.6 |
| Services Index | 51.7 | 51.5 to 52.0 | 47.9 | 52.0 |
Highlights
The UK economy showed a marked loss of momentum in May 2026, as escalating geopolitical tensions, weakening consumer confidence, and persistent inflationary pressures pushed private sector activity into contraction for the first time in over a year. The UK composite PMI fell sharply to 48.5 from 52.6 in April, reaching a 13-month low and signalling a broad-based slowdown in economic activity.
The deterioration was overwhelmingly driven by the services sector, where business activity declined to its weakest level since January 2021. Firms reported delayed consumer spending, subdued investment decisions, and heightened caution linked to the ongoing Middle East war and domestic political uncertainty. International travel and discretionary spending appeared particularly vulnerable to weakening confidence.
In contrast, manufacturing remained comparatively resilient, supported by temporary demand from stock-building and pre-purchasing ahead of expected price increases and potential supply disruptions. However, this strength appears largely precautionary rather than reflective of sustainable demand conditions.
Inflationary pressures remained elevated despite a slight moderation in input cost growth. Rising oil prices, transportation costs, wage pressures, and raw material inflation continued to squeeze firms, while supply-chain disruptions intensified inventory accumulation. Meanwhile, the labour market weakened further, with payroll reductions extending into a twentieth consecutive month.
In summary, the report suggests the UK economy is entering a fragile phase characterised by slowing growth, weakening confidence, and persistent cost-driven inflationary risks. These updates take the RPI to 23 and the RPI-P to 35, meaning that economic activities continue to outpace market expectations in the UK.
Market Consensus Before Announcement
Some erosion seen with the composite down to 51.6 in May from 52.6 in April, manufacturing down to 52.8 from 53.7 and services down to 51.7 from 52.7.
Definition
The flash Composite Purchasing Managers’ Index (PMI) provides an early estimate of current private sector business activity by combining information obtained from surveys of the manufacturing and service sectors of the economy, around 650 companies in each case. The flash data are released around ten days ahead of the final report and are typically based upon around 75-85 percent of the full survey sample. Results covering a range of variables including manufacturing output, employment, new orders, backlogs and prices are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) activity versus the previous month and the closer to 100 (zero) the faster is activity growing (contracting). The report also contains flash estimates of the manufacturing and services PMIs. The survey is produced by S&P Global.
Description
Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' surveys, investors will know what the economic backdrop is for the various markets. The flash PMIs are particularly closely watched as they provide a wide ranging look at economic developments and some of the most up to date information available. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.