Summary

• The UK economy is facing a perfect storm as rising political uncertainty adds to the growing impact from the war in the Middle East.
• The headline Composite PMI Output Index fell sharply in May, according to the preliminary ‘flash’ reading, down from 52.6 in April to 48.5.
• The steepest downturn in demand was reported in the consumer-facing industries such as leisure and recreation, though an increasingly broad-based drop in activity meant any growth was limited to IT.
• Manufacturing fared better than services, though its improved performance looks unsustainable.

The UK economy is facing a perfect storm as rising political uncertainty adds to the growing impact from the war in the Middle East. Businesses are reporting falling output, surging inflation, supply shortages and job cuts in May.

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