The S&P Global UK Manufacturing PMI rose to 48 in July of 2025 from 47.7 in June, revised lower from the flash estimate of 48.2, but aligned with the initial market expectations. While the sector remained in contraction, the latest reading signaled the mildest decline in business conditions since January amid the softest contraction in output in nine months. This was supported by a return to growth in both consumer and intermediate goods sector, although investment goods contracted at a deeper pace. Despite the improvement, manufacturers reported continued challenges, particularly in key export markets, with US tariffs prompting delayed spending decisions, driving new orders to decline for a tenth month running. In turn, backlogs continued to fall and the increase in labor costs from the National Insurance policy drove firms to continue shedding staff. Most firms pointed to persistent headwinds from weak domestic conditions, geopolitical instability, and global trade uncertainty.