Economic Buzz: UK Services PMI At 48.8 In October

3 Nov 2022 , 03:14 PM

UK service providers experienced a modest reduction in business activity during October, which represented the first overall decline in output since February 2021. Survey respondents often commented on shrinking demand and greater risk aversion among clients, largely due to heightened political and economic uncertainty. Escalating energy bills and strong wage pressures led to another rapid increase in business expenses during October. That said, the overall pace of input cost inflation was the least marked since September 2021, with some service sector firms citing reduced freight rates and softer raw material prices. The headline seasonally adjusted S&P Global / CIPS UK Services PMI Business Activity Index registered 48.8 in October, down from 50.0 in September and the lowest reading since January 2021. Lower volumes of service sector output were mostly linked to cautious spending patterns among businesses and consumers. A number of firms noted that political uncertainty since the mini-Budget had adversely impacted business investment and encouraged a wait-and-see approach to new projects. The seasonally adjusted S&P Global / CIPS UK Composite PMI registered 48.2 in October, down from 49.1 in September and below the 50.0 no-change mark for the third month running. Although only modest, the latest reading signaled the fastest rate of decline since January 2021. Manufacturing production fell at a much faster pace than service sector activity. Powered by Commodity Insights