UK businesses reported improving conditions in parts of services and manufacturing, but little appetite to expand their workforces, according to the Bank of England’s latest reports from company contacts.
The September summary, published on 11 September, draws on intelligence gathered in the six weeks to mid-August. Consumer spending, construction and property remained weak.
Pay figures reflect earlier agreements
Reported pay settlements for 2026 averaged 3.6%, up from 3.5% in the previous update. The Bank said the change mainly reflected newly collected information about April agreements, rather than more recent deals.
A pay settlement is an agreed change to pay rates. It is different from a measure of total earnings, which can also reflect bonuses, overtime and changes in the mix of jobs.
Contacts generally expected headcount to remain flat over the next 12 months. Recruitment was easier than usual overall, although specialist and technical shortages persisted.
Investment intentions improved slightly from a low base, with some essential projects restarting. The Bank said more evidence was needed before calling that a trend.
Growth figures also show uneven performance
Official output figures released on the same day put the UK’s July growth at 0.4%, following 0.3% in June and no growth in May.
The Office for National Statistics bulletin showed that gross domestic product, the value of goods and services produced, also grew by 0.4% over the three months to July compared with the previous three months.
Services expanded by 0.6% on that three-month comparison. Production and construction each contracted by 0.5%. All three sectors grew in July alone, showing why the period being compared matters.
Our report on July’s GDP figures examined the contribution from business services. Early GDP estimates can be revised as more information becomes available.
Business conversations add context
The Bank’s regional agents hold confidential discussions with businesses and community organisations through 12 agencies across the UK. Their findings help inform its policy committees.
The summaries report what contacts are experiencing across the economy. They are neither a count of every employer nor an announcement of an interest-rate decision.
Read alongside output statistics, the latest account suggests firms can experience higher activity without planning broad recruitment. For a supplier or jobseeker, the conditions in a particular sector may matter more than the national growth figure.
