UK Firms Report First Growth in Three Months Amid Lower Cost Pressures

UK firms reported growth in July for the first time in three months, according to preliminary data from S&P Global UK Composite Purchasing Managers' Index (PMI). The index rose to 52.1 in July from 49.3 in June, its strongest reading since February.

The surge in business activity was attributed to lower cost pressures, hot weather, and domestic holidays. Chris Williamson, chief business economist at S&P Global Market Intelligence, stated that hospitality firms benefited from these factors as high costs and uncertainty deterred overseas travel.

Cost pressures eased due to lower fuel and raw material costs following a brief de-escalation in the Gulf conflict. The Bank of England is expected to hold interest rates at 3.75% next week, taking into account the recent re-escalation in tensions which risks derailing the easing in cost pressures.