UK business activity fell again in October, PMI shows Reuters

LONDON (Reuters) – British businesses reported another drop in activity this month and spending pressures cooled further, a survey showed on Tuesday, highlighting the risk of a recession as the Bank of England prepares for its policy decisions next week.

The preliminary S&P Global UK Purchasing Managers’ Index (PMI) for the services sector fell to 49.2 in October from 49.3 in September, the lowest since January and remains below the 50 mark. in a row.

A Reuters poll of economists pointed to an unchanged reading.

Services firms recorded the smallest increase in input costs since February 2021, although selling prices rose at a slightly faster rate.

Overall, the PMI survey pointed to a 0.1% quarterly decline in economic output, with confidence among business owners hitting its lowest point so far this year.

“This supports our view that there is a slight slowdown and the Bank of England is done raising interest rates,” said Ruth Gregory, deputy chief UK economist at consultancy Capital Economics.

The PMI for British manufacturing rose to 45.2, up from 44.3 in September, the highest level in three months, but still signaling a rapid contraction in manufacturing.

The composite PMI, which combines service activity and industrial production, increased to 48.6 from 48.5.

(By Andy Bruce)