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Business activity decreased again across the UK private sector economy during October, according to preliminary survey data on Tuesday.
The S&P Global/CIPS flash UK flash composite purchasing managers’ index rose slightly to 48.6 points in October from 48.5 in September.
Falling below the 50-point no-change mark indicates that the private sector remained in contraction during October. This marks the third month running of contraction.
The flash services PMI business activity index dropped to a nine-month low, registering at 49.2 in October, compared to 49.3 in September.
S&P survey respondents commented on subdued consumer confidence, the impact of elevated borrowing costs, and weak client demand across the real estate sector, S&P said.
Meanwhile, the flash manufacturing PMI rose to 45.2 from 44.3. Whilst this marks a three-month-high, it also signifies the eighth consecutive month of contractions in the sector.
Looking ahead, S&P said concerns about the outlook for business and consumer spending meant that output growth expectations for the year ahead were the lowest since December 2022.
It added that lower confidence also contributed to hiring freezes and falling workforce levels in October.
Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said: ‘The UK economy continued to skirt with recession in October, as the increased cost of living, higher interest rates and falling exports were widely blamed on a third month of falling output.’
Williamson added: ‘Encouragingly, cost pressures have continued to moderate, in part helped by reports of lower wage inflation and further falls in prices charged by manufacturers. However, selling price inflation for services remains somewhat elevated, and even ticked higher in October, pointing to some stickiness of headline inflation around the 4% mark into the early months of next year.’
The flash PMIs are compiled by S&P Global from responses to surveys sent out to around 650 manufacturers and 650 service providers in the UK. Responses are collected in the second half of the month.
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