UK flash PMIs for November delivered a broadly downbeat signal on the economic outlook. Manufacturing managed to edge back into expansion territory, rising from 49.7 to 50.2 — its highest level in 14 months. But that improvement was overshadowed by a sharp drop in services activity, with PMI Services sliding from 52.3 to 50.5, a seven-month low. As a result, Composite PMI fell notably from 52.2 to 50.5.
According to Chris Williamson of S&P Global Market Intelligence, the latest readings point to an economy that has “stalled,” with job losses accelerating and business confidence deteriorating sharply. The PMI readings are broadly consistent with zero GDP growth for November and only around 0.1% growth so far in Q4.
While part of the slowdown is being blamed on paused spending decisions ahead of the Autumn Budget, weakening confidence suggests the hesitation may “turn into a downturn” if households and firms brace for new “demand-dampening measures” .
The inflation outlook also softened meaningfully. Selling price inflation dropped to its lowest in almost five years, with goods prices falling at the fastest rate since 2016 and service-sector pricing power weakening.
Taken together, the PMI data reinforce expectations that the BoE would cut rates in December, especially if next week’s Budget reinforces the pessimistic tone.
