UK’s PMI Manufacturing was finalized at 49.9 for October, down from September’s 51.5, marking the first contraction since April.
Rob Dobson, Director at S&P Global Market Intelligence, noted that the sector has entered Q4 on an “uncertain footing,” as businesses adopt a wait-and-see approach amid policy speculation leading up to the recent Budget. This cautious stance has weighed on investment and spending, with business optimism hovering just above September’s nine-month low.
However, there was positive news on inflation. Input costs dropped to a 10-month low, with inflation easing significantly—one of the largest declines in the survey’s 33-year history. Selling price inflation also moderated, giving BoE additional flexibility to support growth should demand weaken further.
Looking forward, Dobson noted that November’s PMI release will be closely watched for signs of how the Budget impacts business conditions and confidence level.
