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Macro EconomyMediumUpdated•Originally published 24 July 2026•Updated 24 July 2026•
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UK and Eurozone Private Sector Activity Returns to Expansion in July Led by Manufacturing

Key Facts

1The UK Flash Composite PMI rose to 52.1 in July from 49.3, marking its highest level in three months and returning to expansion.
2Eurozone Flash Composite PMI rebounded to 51.9 in July, signaling the first increase in private-sector output in four months.

In a move reflecting the resilience of European economies against inflationary pressures, flash data showed private-sector activity in the UK and Eurozone returned to expansion in July. According to reports, the UK Flash Composite PMI rose to 52.1, marking its strongest growth in nearly two years, driven by accelerating manufacturing output and a rebound in services. Similarly, Eurozone activity climbed to 51.9, signaling the first increase in private-sector output in four months.

This positive data comes amid strengthening domestic demand despite ongoing cost-of-living pressures weighing on household spending. Per market data, this rebound coincides with easing price pressures, as the Eurozone annual inflation rate was recorded at 2.8% earlier in July according to data from July 17, 2026. Furthermore, UK employment figures showed relative stability with the unemployment rate at 4.9%, supporting steady economic activity despite geopolitical challenges.

While this surprise growth reduces immediate recession fears, markets remain cautious regarding the durability of the recovery given energy price volatility and supply chain disruptions.