LONDON — Britain's private sector returned to growth in July, marking its strongest performance since February, according to the latest S&P Global UK Composite Purchasing Managers' Index (PMI). The index rose to 52.1, up from 49.3 in June, moving back above the 50-point threshold that signals economic expansion.

The improvement was driven by stronger activity across both the services and manufacturing sectors, while businesses also reported easing cost pressures as fuel and raw material prices declined. Hospitality firms benefited from warm weather, increased domestic spending and seasonal tourism, contributing to the broader recovery.

Business confidence has also strengthened, supported by improving consumer sentiment and recent government measures aimed at reducing costs for households and businesses. However, employers remain cautious about hiring as they continue to monitor global uncertainty and domestic labour market conditions.

Economists say the latest survey suggests the UK economy has regained momentum after a softer period earlier in the year. Investors will now be watching future inflation data and the Bank of England's next policy decisions for further signs that the recovery can be sustained.