PwC comments on S&P Global UK PMI data - May 2026

Commenting on the S&P Global Flash UK PMI data for May 2026, Jake Finney, Senior Economist at PwC, says:

“The May PMI provides the strongest evidence yet that a more challenging international backdrop, combined with heightened domestic uncertainty, is starting to weigh on the UK economy. The composite index fell below the critical 50 threshold for the first time in over a year, pointing to a contraction of around 0.2% on a quarterly basis. 

“This is not entirely surprising. May’s softer reading may partly reflect payback after April’s unusually strong outturn, which was likely flattered by some front-loading of activity. However, the scale of the decline is more concerning, with service providers reporting the sharpest fall in activity since the pandemic.

“The challenge for the Bank of England is that price pressures are intensifying at the same time as activity is weakening. Around two-thirds of manufacturers and around half of service providers reported an increase in their average cost burdens in May, driven by higher energy, raw material and wage costs. The key question is whether holding rates steady will prove sufficient, or whether further evidence of rising inflation pressures forces the Bank to tighten policy again, despite signs that activity is softening.”