UK private sector activity grew at its fastest pace in eight months in October, and employment rose for the first time since September 2024. Input costs climbed at the quickest rate since June, and S&P Global's chief business economist called a Bank of England rate hike a near certainty.
UK private sector activity expanded at its fastest pace in eight months in October, according to flash PMI data from S&P Global. The Flash UK Composite Output Index rose to 53.1 from 52.0 in September, its highest reading since February and its fourth consecutive month above the 50.0 threshold.
Services and manufacturing both gain
The Flash UK Services Business Activity Index reached 53.1, up from 52.1 in September. The Flash UK Manufacturing PMI increased to 52.8 from 51.9, a five-month high.
ActionForex reported that the services and manufacturing readings both exceeded market expectations, which the table in its report put at 51.8 for each. New orders across the private sector grew at the sharpest rate in 25 months, with firms citing a general recovery in customer demand at home and abroad.
Hiring returns as costs climb
Private sector employment increased for the first time since September 2024, ending a two-year period of job cuts. The rise was marginal and came from service providers, while manufacturers reduced staffing slightly.
Pricing pressure moved the other way. Input costs rose at the fastest pace since June, driven by manufacturers' higher energy, raw material and transportation expenses. Prices charged by firms rose at a slightly slower pace than in September.
Economist points to a Bank of England move
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said: "Price pressures remain worryingly elevated". He said this makes a rate hike from the Bank of England at its upcoming policy meeting a near certainty and likely shortens the odds of further rate hikes into 2027.
Business optimism for the year ahead edged up but stayed below the long-run survey average.
Sources: Investing.com, ActionForex
Trading involves risk.
Risk Disclaimer
