The UK services sector experienced its first decline since April 2025, according to the S&P Global UK services PMI survey, which recorded a reading of 49.3 in May, down from 52.7 in April. The downturn was driven by reduced new work and concerns over the ongoing conflict in the Middle East, impacting customer spending. Tim Moore, economics director for S&P Global Market Intelligence, noted: “Many service sector companies noted that the Middle East conflict had an adverse impact on sales pipelines.” Job cuts also increased, reflecting rising operational costs and economic uncertainty.

UK construction activity has fallen to its lowest level since the global financial crisis, with the S&P Global purchasing managers’ index (PMI) dropping to 38.2 in May. The decline threatens the Labour’s pledge to build 1.5m homes. The residential construction sub-index fell to 36, indicating significant challenges ahead. Tim Moore, economics director at S&P Global Market Intelligence, noted that economic uncertainty and rising inflation contributed to the downturn.

Luca Paolini, the chief strategist at Pictet Asset Management, has warned that wealth taxes are becoming more likely as profits from AI-focussed investments rise. “It’s almost inevitable…there will be a significant demand for wealth taxes, inheritance taxes, whatever you want to call it.” However, he warned against increasing capital gains tax arguing that this would discourage people from investing in shares.

Writing in City AM, Anne Strickland of the TaxPayers’ Alliance critiques the “Labour Thinks” group’s proposal for increased tax-funded spending to stimulate growth. She argues that high taxes, currently over £1trn annually, do not foster economic growth but rather hinder it by discouraging investment and work. She suggests that a simpler, flatter tax system could promote growth, such as the models adopted by Estonia and Singapore.

The number of households in which every adult has never worked reached a record 298,000 in the first three months of this year, according to the Office for National Statistics. This marks an increase of nearly 40,000 from the previous year. The figures come amid growing concerns about youth unemployment, with predictions that it could reach 16.9% this year.

New research from Acas reveals that one in three employers are likely to implement redundancies by early next year. The survey of 1,000 businesses indicates larger firms are more likely to make cuts.

Private equity is transforming the professional services sector, City AM reports, providing essential capital amid market disruptions. Jacob Silverman, CEO of Kroll, told the paper that private equity is crucial for future growth, particularly for accountancy firms. He said: “Partnering with a private equity sponsor that has a similar mindset, values, and growth agendas, can be a very, very positive combination.” The shift from traditional partnership models to scalable corporate structures can be seen with firms such as Grant Thornton, which saw double digit revenue in the 12 months after receiving an investment from Cinven.

Lex Greensill has been banned from acting as a company director in the UK for nine years. The financier behind the collapsed lending firm Greensill Capital agreed to the disqualification from the Insolvency Service on Thursday, five years after his company collapsed with liabilities of more than £1.6bn. Greensill’s conduct was found to have breached a legal duty under UK corporate law to “exercise reasonable care, skill and diligence as a company director”.