Britain’s job market has seen nearly two years of consecutive job cuts, matching the length of the downturn during the 2008-09 global financial crisis in the services sector, and falling just one month short overall in the private sector [1, 2, 3]. July 2026 marked the 22nd consecutive month that UK services firms and wider private sector employers reduced headcount, according to the S&P Global Purchasing Managers' Index (PMI) [1, 2, 3].
Despite ongoing job losses, the pace of cuts slowed in July to its slowest rate since October 2025 [1, 2, 3]. At the same time, the overall UK PMI rebounded to 52.2 in July from 49.3 in June, indicating a return to broad economic growth despite geopolitical challenges [1, 2, 3]. Tim Moore, economics director at S&P Global Market Intelligence, said, "UK service providers moved back into growth mode during July as greater consumer spending and strong demand for technology services helped to boost overall business activity. Many firms cited geopolitical uncertainties and the Middle East conflict as factors limiting their growth trajectory, despite some signs of easing risk aversion among clients" [1].
Employers attributed staff reductions mainly to cost-cutting efforts and the adoption of artificial intelligence (AI) technologies aimed at improving productivity [1, 2, 3]. Despite the persistent layoffs, official data show that the UK unemployment rate remains well below the peaks seen after the 2008-09 financial crisis, with signs that the employment downturn may have bottomed out [1, 2, 3].
Geopolitical uncertainties, including the re-escalation of US-Iran tensions in mid-2026, have continued to limit business growth but have not halted the PMI’s rebound [1, 2, 3]. The Labour Party took power in the UK government in summer 2024, amid these economic changes [1].
The July data underscore a lengthy adjustment period for Britain’s private sector, with job cuts continuing into their 22nd month. The next major update on UK private sector employment and PMI data is expected next month.
