What's happened
The S&P Global UK services PMI fell to 50.8 in November, indicating slower growth amid rising employer national insurance contributions and minimum wage increases. Businesses are cautious about hiring, with many reporting reduced activity and investment due to the recent budget measures. The outlook for the UK economy remains uncertain.
Why it matters
What the papers say
According to The Independent, the S&P Global UK services PMI survey revealed a slowdown in growth, with Tim Moore noting that business activity is close to stalling. Bloomberg echoed these concerns, highlighting that the composite PMI dropped to 50.5, suggesting a cooling in private-sector activity. The Guardian reported that UK manufacturers are facing a downturn, with the PMI falling to a nine-month low of 48.0, indicating a contraction in orders and output. This sentiment is reinforced by comments from various business leaders who express concerns over the impact of the budget measures on their operations.
How we got here
The UK economy has faced challenges following Chancellor Rachel Reeves' budget announcement, which included significant tax increases totaling £40 billion. These measures have raised employer national insurance contributions and the minimum wage, impacting business operations and investment decisions.
Common question
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Rachel Jane Reeves is a British Labour Party politician serving as Shadow Chancellor of the Duchy of Lancaster and Shadow Minister for the Cabinet Office since 2020. She has been the Member of Parliament for Leeds West since 2010.
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