{
  "id": 5292800,
  "title": "Services sector cuts jobs for nearly two years under cost pressures",
  "url": "https://urgent.news/2026/09/03/services-sector-cuts-jobs-for-nearly-two-years-under-cost-pressures",
  "topic": "business",
  "section": "Business",
  "published": "2026-09-03T08:58:05.000Z",
  "source": {
    "name": "City AM",
    "slug": "city-am",
    "url": "https://www.cityam.com/services-sector-cuts-jobs-for-nearly-two-years-under-cost-pressures/"
  },
  "original_language": "en",
  "account": "From August 2025 to August 2026, employment in the UK's services sector saw a 23-month decline, as businesses endured cost pressures and maintained hiring freezes before trimming staff numbers. The S&P's Purchasing Managers Index (PMI) for the services industry, a key economic indicator, highlighted the sector's longest stretch of workforce reductions since 1996. The PMI showed a reading of 52.5 in August, up slightly from 52.1 in July, indicating the sector was growing. Factors contributing to the cost pressures included rising fuel, transportation, and wage bills. Some firms turned to automation to improve productivity. A mid-sized UK firm could face a £827,000 annual increase in costs due to government policy decisions, as calculated by the British Chambers of Commerce. Despite the prolonged job cuts, the pace of layoffs slowed to its lowest rate since October 2025, driven by modest recovery in new business and domestic confidence. However, S&P's chief economist, Tim Moore, noted that service providers remain cautiously optimistic about the year ahead, with confidence levels nearing those before the Middle East conflict. The UK's new government faces challenges in maintaining positive momentum, as the Budget approaches on October 28th. Prime Minister Andy Burnham and Chancellor John Healey will need to navigate surging borrowing costs and geopolitical tensions while addressing inflationary pressures. The global rise in bond yields, caused by soaring oil prices, has slashed fiscal headroom to £13bn, below previous estimates of £15bn. This reduction in fiscal headroom will force the Office for Budget Responsibility (OBR) to revise its debt interest payment projections for 2030, raising the possibility of a substantial tax increase. The UK government anticipates spending around £135bn over five years to service its debt. Chancellor Healey's early spending plans and commitment to meet political demands have raised the likelihood of further tax hikes, alongside increased defense spending and support for the cost of living.",
  "summary": "Employment in the UK’s services sector dropped for the 23rd consecutive month in August as businesses maintained hiring freezes and trimmed headcounts following cost pressures. S&P’s latest Purchasing Managers Index (PMI) for the services industry – which is closely monitored by economists – revealed the sector has continued its longest continuous stretch of workforce reductions [...]",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}