- Prior 49.3
- Manufacturing PMI 45.2 vs 44.7 expected
- Prior 44.3
- Composite PMI 48.6 vs 48.7 expected
- Prior 48.5
The headline reading is a 9-month low and it points to further moderation in overall activity in the services sector. With both manufacturing and services sectors contracting, it indicates a sluggish start to Q4 as the UK economy sits on the brink of a recession. S&P Global notes that:
“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.
“The overall pace of decline remains only modest, signalling a mere 0.1% quarterly rate of GDP decline, but gloom about the outlook has intensified in the uncertain economic climate, boding ill for output in the coming months. A recession, albeit only mild at present, cannot be ruled out.
“Encouragingly, cost pressures have continued to moderate, in part helped by reports of lower wage inflation and further falls in prices charged by manufactures. 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.
“In this context, any upward inflation pressures due to higher oil prices will be a major concern, meaning it would be unlikely for policymakers to rule out the possibility of rates rising again later in the year.”