UK service firms slash jobs at fastest rate for almost four years

London: So, it looks like the service sector in the UK is really feeling the pinch. Job cuts are happening at the fastest rate we’ve seen in almost four years. It’s all tied to worries about how consumers are feeling, even though there was a tiny uptick in activity last month.

The S&P Global UK services PMI survey showed a score of 51.1 in December, which is a slight improvement from November’s 50.8. But honestly, that previous score was the lowest in over a year, so it’s a mixed bag.

Just to break it down, anything above 50 means growth, while below that indicates a decline. The economists were hoping for a score of 51.4, so we’re still lagging a bit behind expectations.

Tim Moore from S&P Global pointed out that the service sector ended the year with just a small bump in business activity. New work is coming in at a crawl, and many businesses are feeling the heat from falling confidence levels.

It seems like everyone is worried about the UK’s economic outlook for 2025, which is making things even tougher. While some areas, like tech services, are still doing well, many firms are struggling with weak demand and tighter budgets.

New orders are almost stagnant, and for the first time since September, export sales have dropped. It’s a cautious vibe all around, especially with rising payroll costs leading to the biggest job cuts since January 2021.

Nearly twice as many businesses reported cutting jobs compared to those hiring. Many are freezing hiring or not replacing staff because of high costs. Overall, the mood is pretty gloomy, with business optimism at a two-year low.