Private sector new business growth jumped to a 15-month high in July, boosting hopes of a summer rate cut, according to a closely-watch survey.  

Sales growth across both the manufacturing and services sectors lifted this month, leading to the strongest increase in total new business since April 2023, reports the S&P Global Flash UK PMI Composite Output Index.  

Britain’s manufacturing sector expanded at its strongest pace in more than two years, with the upturn encouraging firms to take on staff at the quickest pace for 13 months.  

The survey says: “Activity growth among services firms quickened slightly in July, supported by a much faster increase in new work compared to June.   

“That said, the pace of activity expansion was still among the softest recorded in 2024 to date.”  

However, average prices charged at private sector companies rose at the slowest rate in almost three-and-a-half years in July.  

Overall, its Flash UK PMI Composite Output Index lifted to 52.7 from 52.3 June, a two-month high.  

S&P Global chief business economist Chris Williamson says: “The first post-election business survey paints a welcoming picture for the new government, with companies operating across manufacturing and services having gained optimism about the future, reporting a renewed surge in demand and taking on staff in greater numbers.

“Prices have meanwhile risen at their lowest rate for three and a half years, further raising the prospect of a summer rate cut.”  

The Bank of England’s base rate has remained at a 16-year high of 5.25% since last August, despite inflation returning to its 2% target.     

However, this has not prevented a range of lenders pricing in one, if not two, rate cuts by the end of the year as they compete for business.  

HSBC, Virgin Money and Halifax have all reduced home loan prices in recent days.  

Nationwide became the first major lender to bring back sub-4% mortgages today. It sells five-year fixes at 60% loan to value, with a £1,4992 fee, at 3.99%.   

Mortgage Advice Bureau Deputy chief executive Ben Thompson says: “Fixed-rate mortgages under 4% are back on the market showing there are deals to be had.   

“The reality is that lenders have already priced in that all-important first rate cut, whether it comes in August or September.

“While we might see a few ups and downs depending on timings, there are good rates on the market for prospective buyers and remortgagers.”