Weekly Market Update: 5 December 2025
Stephen Willerton · Posted on: December 5th 2025 · read
The reverberations from last week’s UK budget have continued to be felt this week. Chancellor Rachel Reeves has remained under pressure, and Richard Hughes, the chairman of the Office for Budget Responsibility, announced his resignation at the start of the week as he took “full responsibility” for the organisation’s budget day error. UK economic data released in recent days has also pointed to a slowdown in activity due to the uncertainty ahead of the budget.
On Thursday, data released by S&P Global UK showed that the UK Construction Purchasing Managers’ Index fell from 44.1 in October to 39.4 in November, its steepest contraction since May 2020.
On Thursday, data released by S&P Global UK showed that the UK Construction Purchasing Managers’ Index fell from 44.1 in October to 39.4 in November, its steepest contraction since May 2020. The slump hit across all major sub-sectors: residential, commercial and civil-engineering projects, as business confidence sank and new orders dried up, with firms deferring investment decisions until after the budget. On the same day, a Bank of England (BoE) survey of chief financial officers revealed that companies reduced employment by an annual rate of 1.8% in November and also that they expect headcount to drop by 0.7% in the year ahead, painting a somewhat gloomy picture for the UK economic outlook.
On the same day, a Bank of England (BoE) survey of chief financial officers revealed that companies reduced employment by an annual rate of 1.8% in November and also that they expect headcount to drop by 0.7% in the year ahead, painting a somewhat gloomy picture for the UK economic outlook.
Meanwhile, the UK’s services sector also showed signs of weakening. The S&P Global UK Services PMI came in at 51.3 in November, down from 52.3 in October. It remains above the 50 mark — still signalling expansion — although the slowdown reflects softer demand and a first drop in new orders in four months. Despite the weaker data, the reading came in higher than analysts’ expectations of 50.5 and, with the budget now in the rear-view mirror, traders took a positive view of the data and both sterling and the domestically focussed FTSE 250 Index strengthened in the latter part of the week.
Our specialist's final thought
"Despite the weaker data, the reading came in higher than analysts’ expectations of 50.5 and, with the budget now in the rear-view mirror, traders took a positive view of the data and both sterling and the domestically focussed FTSE 250 Index strengthened in the latter part of the week."
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