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UK Composite PMI Hits 1-Year Low, BoE Holds Rates

5/22/2026

35 7 Full Breakdown

Summary

UK PMI Hits Low

The S&P Global Flash UK Composite Purchasing Managers’ Index fell to 50.5 in March 2025, its lowest level in a year.
The drop reflected a 12-month low in services, weaker manufacturing output, and new orders falling for the first time since November.
The Bank of England will wait for proof that inflation is at its 2% target before easing policy.
Investors await the Spring Budget for business-investment measures.

Summary

UK PMI Slides

The UK Composite PMI dropped to 48.5, its first sub-50 reading since April 2025, raising market worries.
Money-market pricing gave an 86% chance the Bank of England will leave rates unchanged on June 18.
Analysts said the Strait of Hormuz closure is choking oil flows and pushing energy prices higher.
Henry Cook, senior economist at MUFG Bank, warned that higher energy costs could force a sharp rate hike.

Summary

UK PMI Falls

The services slump is linked to domestic political uncertainty around Prime Minister Keir Starmer’s leadership.
Payroll fell for the 20th month, ONS reporting 100,000 jobs lost in April after a 28,000 decline in March, while inflation eased to 2.8% from 3.3% and wage growth slowed to 3.4%.
Andrew Wishart, economist at Berenberg, warned a PMI decline could shift GDP from a 0.6% Q1 expansion to a –0.2% Q2 contraction.

History

Historical Context

September 2007 saw a run on Northern Rock, forcing the Bank of England to act as lender of last resort and leading to the bank’s nationalisation in February 2008. The crisis deepened, so Governor Mervyn King cut the base rate to 0.5% in January 2009 and the FTSE 100 fell about 30% that year. These shocks echo the IMF-defined global recession that began in Q3 2008.

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UK PMI Hits Low

The S&P Global Flash UK Composite Purchasing Managers’ Index fell to 50.5 in March 2025, its lowest level in a year.
The drop reflected a 12-month low in services, weaker manufacturing output, and new orders falling for the first time since November.
The Bank of England will wait for proof that inflation is at its 2% target before easing policy.
Investors await the Spring Budget for business-investment measures.

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