UK October flash services PMI 51.8 vs 52.4 expected

• Services PMI 51.8 vs 52.4 expected and 52.4 prior.
• Manufacturing PMI 50.3 vs 51.4 expected and 51.5 prior.
• Composite PMI 51.7 vs 52.6 expected and 52.6 prior.

Key Findings:

• Flash UK PMI Composite Output Index(1) at 51.7 (Sep:
  52.6). 11-month low.
• Flash UK Services PMI Business Activity Index(2) at
  51.8 (Sep: 52.4). 11-month low.
• Flash UK Manufacturing Output Index(3) at 50.9
  (Sep: 53.6). 6-month low.
• Flash UK Manufacturing PMI(4) at 50.3 (Sep: 51.5).
  6-month low.

Comment:

Commenting on the flash PMI data, Chris Williamson,
Chief Business Economist at S&P Global Market
Intelligence said:

“Business activity growth has slumped to its lowest for
nearly a year in October as gloomy government rhetoric
and uncertainty ahead of the Budget has dampened
business confidence and spending. Companies await
clarity on government policy, with conflicts in the Middle
East and Ukraine, as well as the US elections, adding to
the nervousness about the economic outlook.

The early PMI data are indicative of the economy growing
at a meagre 0.1% quarterly rate in October, reflecting a
broad-based slowing of business activity, spending and
demand across both manufacturing and services.
Worryingly, the deterioration in business confidence in the
outlook has also prompted companies to reduce
headcounts for the first time this year.

Cleary, the policies announced in the Budget have the
potential to play a major role in steering the direction of the
economy in the months ahead.
Encouragingly, however, a further cooling of input cost
inflation to the lowest for four years opens the door for the
Bank of England to take a more aggressive stance towards
lowering interest rates, should the current slowdown
become more entrenched.”

This article was written by Giuseppe Dellamotta at www.forexlive.com.