Increase in New Orders Boosts UK Private Sector Growth in December

06:54 AM EST, 12/16/2025 (MT Newswires) -- Private sector output in the UK regained momentum in December on the back of higher new order intakes and an accelerated increase in business activity in both the manufacturing and service sectors. The S&P Global UK PMI Composite Output Index rose to 52.1 in December 2025, against 51.2 in the previous month, according to flash data from S&P Global published Tuesday. Analysts expected the reading to come in at 51.6. The growth in output was bolstered by an improvement in demand in the service sector and the sharpest increase in new work since October 2024. The services PMI reached a two-month high of 52.1 in December, against the prior 51.3 and the consensus of 51.6. On the manufacturing side, the PMI climbed to a 15-month high of 51.2 from the prior 50.2 and the market forecast of 50.4. "December's flash PMI surveys brought welcome news on faster economic growth at the end of the year, with businesses buoyed in part by the post-Budget lifting of uncertainty," said Chris Williamson, chief business economist at S&P Global Market Intelligence. "However, the overall pace of output and demand growth remains lacklustre, and the expansion is still very dependent on technology and financial services activity, with many other parts of the economy struggling to grow or in decline." In terms of jobs, employment in the private sector declined for the fifteenth straight month in December amid "intense" cost pressures on companies as the level of input price inflation hit its highest since May. Businesses also cited the impact of heightened business uncertainty as a key factor to the decrease in staff numbers. Looking ahead, business activity expectations for the next 12 months recovered "modestly," with optimism among manufacturers and service providers at its second-strongest level since October 2024. Increased economic uncertainty, growing competitive pressures and higher operating costs, however, are among key concerns that weigh down on companies' improved outlook, particularly those in the manufacturing industry. "Job losses are also again worryingly widespread, and it remains to be seen whether the uptick in orders during December will persuade more companies to start hiring again, especially as rising staff costs continue to be reported as one of the key concerns of businesses," Williamson noted. "The sluggish growth and worrying jobs data from the flash PMI data therefore suggest that the odds remain in favour of a further cut to interest rates at the December MPC meeting, but that the path to further rate cuts in 2026 remains very data dependent, as policymakers await confirmation that price pressures are going to soften materially as the year proceeds." The Bank of England is scheduled to hold its next monetary policy meeting on Thursday.