UK Economy Contracts in April as Major Sectors Struggle
(MENAFN) The British economy faced a downturn in April, as recent data reveals a contraction across major sectors.
Figures released by Standard & Poor's (S&P) on Wednesday highlight a decline in the UK's services, manufacturing, and composite Purchasing Managers' Index (PMI) in April, signaling economic contraction. The services PMI dropped sharply from 52.5 in March to 48.9 in April, reaching its lowest level in nearly 27 months. Similarly, the manufacturing PMI fell from 45.3 to 44, marking the weakest reading in almost 32 months, while the composite PMI slipped from 51.5 to 48.2, the lowest in nearly 29 months.
Despite the larger-than-expected drop, the market had already anticipated the contraction, reflecting the ongoing challenges facing the British economy. Factors such as domestic and international pressures have led to a slowdown in both business expansion and consumer spending in recent months.
On the business front, rising employer National Insurance contributions, which took effect in April, forced many companies to implement layoffs and cost-cutting strategies. A survey from the British Chambers of Commerce (BCC) revealed that just 20 percent of businesses were hiring new staff in the first quarter of this year, down from 24 percent in the previous quarter. In a bid to cut costs, 20 percent of companies reduced spending on employee training, while business closures surged in the first quarter of 2025.
An analysis by Altus Group, based on government data, showed that the number of pubs in the UK dropped below 39,000 by the end of 2024, the first such decline in history. In 2024 alone, 412 pubs were closed or repurposed, averaging over 34 closures per month. Data from the Campaign for Real Ale also reveals that 303 pubs closed in the first three months of 2025.
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