- Prior 52.4
- Composite PMI 51.8 vs 51.7 prelim
- Prior 52.6
Services activity continues to see slowing momentum in October, with the weakest rise in business activity since November last year. Adding to that, employment conditions showed a fall for the first time this year. So, that is something that the BOE might want to take note of in terms of labour market developments moving forward. S&P Global notes that:
“October data signalled another slowdown in output
growth across the service sector as heightened business
uncertainty and concerns about the general UK economic
outlook had an adverse impact on demand conditions.
“The latest expansion of service sector activity was the
weakest since November 2023, while new business growth
slipped to a four-month low. “The wait for clarity on government policy ahead of the
Autumn Budget was widely reported to have weighed on
business confidence and spending. Broader geopolitical
concerns and forthcoming US elections also added to a
sense of wait-and-see on business investment decisions
in October. At the same time, cost of living pressures
remained a constraint on household spending.
“With service providers grappling with softer new order
growth and less upbeat business activity expectations for
the year ahead, the latest survey pointed to a decline in
staffing numbers for the first time since December 2023.
A number of firms also noted budget constraints due to
elevated salary pressures.
“Higher wages resulted in another month of strong input
cost inflation across the service economy. The overall rate
of inflation edged up to a three-month high, but remained
much weaker than seen on average in the first half of
2024. Output charge inflation meanwhile held close to the
43-month low seen in September, with the latest reading
consistent with a longer-term trend of decelerating price
pressures across the service sector.”