UK Private Sector Growth Slumps as Interest Rates Bite
Britain’s private sector growth nosedived last month, a fresh survey reveals. Despite easing inflation, rising Bank of England interest rates have hit demand hard, dragging down the services sector.
The latest S&P Global/CIPS survey shows the UK services Purchasing Managers’ Index (PMI) dropped to 53.7 in June, down from 55.2 in May. While still above the growth threshold of 50, it’s the lowest reading since March and the sharpest monthly fall since August 2022. The overall composite PMI, blending manufacturing and services, also hit a three-month low at 52.8.
“Rising interest rates and a gloomy economic outlook dented customer demand, especially in construction and real estate,” said Tim Moore, economics director at S&P Global Market Intelligence.
Boosted by a surprise hike in the Bank of England base rate to 5%—the highest since 2008—the market stared down stubborn 8.7% inflation in May. Governor Andrew Bailey warned inflation may prove “slow to moderate,” piling pressure on businesses.
Thames Water Debt Crisis: Customers Won’t Pick Up The Tab
In other big news, Ofwat chief David Black vowed that Thames Water customers won’t foot the bill if the company’s mounting debts spiral out of control. Thames Water is under huge financial strain, raising fears of government intervention if it can’t raise funds fast.
Black stressed the firm still has time to sort out its money woes. This assurance comes as Thames Water grapples with massive debt and scrutiny over its financial future intensifies.
Rail Ticket Offices Face Mass Closures Amid Online Surge
Train operators are ploughing ahead with plans to shut hundreds of ticket offices across England. A public consultation will soon launch on the closures, set to roll out over the next three years.
Staff will shift from ticket counters to station concourses, focusing on selling tickets, offering travel advice, and improving accessibility. But the move has sparked fury among rail unions, who warn strikes could be on the horizon.
The Rail Delivery Group (RDG) says only 12% of train tickets are now bought at kiosks—a steep drop from 85% in 1995—as passengers prefer online and machine purchases. RDG argues this revamp will let staff better assist travellers, ditching outdated ticket offices for more hands-on service.
