UK Private Sector Activity Drops to 11-Month Low

The UK's private sector activity fell to an 11-month low in October, with the S&P Global composite purchasing managers' index (PMI) dropping to 51.7 from 52.6 in September, lower than economists' expectations. This decline is attributed to growing uncertainty surrounding the upcoming Autumn Budget, as well as geopolitical tensions from conflicts in the Middle East and Ukraine, and the US elections, which have dampened business confidence. Both the manufacturing and services sectors experienced slowdowns, with the manufacturing index at a six-month low of 50.3 and services at 51.8. Additionally, for the first time in 2024, hiring has decreased, reflecting broader concerns in the economic outlook. Chancellor Rachel Reeves has indicated tough decisions ahead in the Budget, which may further impact business sentiment. With inflationary pressures easing, there is cautious optimism among firms regarding future output expectations, despite the current decline.