UK private-sector jobs slump continues for 12th straight month as public sector grows, PMI shows faltering economy

Private-sector employment fell for the 12th consecutive month, the longest streak since the Covid-19 pandemic, according to S&P Global PMI. In the three months to September, around 50,000 private-sector jobs were shed, underscoring a deteriorating economic outlook under Labour as the public sector continues to expand.

Private-sector activity also slowed, with September's PMI at 51.0, down from 53.5 in August, indicating only modest growth. The job losses extend a pattern since October last year, when Labour unveiled its initial Budget. Excluding the Covid period, such a sustained decline has not occurred since the 2008-09 financial crisis.

Public-sector hiring rose by about 75,000 since Labour took office, reaching the highest level since 2011, according to the same data overview. Analysts say the private-sector weakness is compounded by policy choices. The government’s employer national insurance hike has raised the cost of hiring, while some critics argue that tax measures have weighed on firms’ ability to grow. Chris Williamson of S&P Global Market Intelligence described the data as showing a mix of weakening growth, softer overseas trade, slipping business confidence and further job losses, suggesting the economy may be faltering.

In a separate assessment, S&P Global Ratings upgraded the UK growth outlook for the year to about 1.2%, from 0.9%, attributing the improvement to a stronger start to the year as firms front-loaded exports to the United States ahead of tariff deadlines associated with changing trade policy.

Industry voices warn that the UK risks missing out on investment in new medicines. Eli Lilly chief executive David Ricks said the UK could fall behind on drug investment if the regulatory and cost environment remains unfavourable.