The preliminary S&P Global UK Composite PMI rose to 53.1 in October from 52.0 in September, its highest reading since February, as new orders and AI-related demand picked up. Businesses added workers for the first time since a 2024 tax increase, while cost inflation strengthened and the Bank of England was expected to raise rates on November 5.
The preliminary S&P Global UK Composite Purchasing Managers' Index climbed to 53.1 in October from 52.0 in September, exceeding every forecast among economists polled. Manufacturers recorded their strongest output increase in more than two years, services firms reported faster growth in new orders, and companies added workers for the first time since hiring was hit by a tax increase in the 2024 budget.
Some firms cited a sales boost from AI investment spending and rising demand for technology services. Business cost inflation was the strongest since June, especially among manufacturers, while prices charged by companies rose less sharply than in September. S&P Global Market Intelligence chief business economist Chris Williamson said price pressures made a Bank of England rate increase at its November 5 meeting a near certainty and could bring further increases into 2027.
Some companies held off on spending ahead of the following week's budget. Business expectations for the year ahead edged up in October but remained below their long-term average, with firms concerned about wars in Ukraine and the Gulf as well as higher borrowing costs.
