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UK September flash PMI points to weak growth and higher inflation pressures
The report linked slower hiring and output growth to high energy prices and elevated costs, keeping focus on Middle East-driven oil and Bank of England rate expectations.
A UK flash services PMI for September came in at 51.7 versus the 52.0 expected level, signaling sluggish economic momentum alongside intensifying inflation pressures, according to Forexlive. The release also showed manufacturing PMI at 52.0 versus 51.5 expected, while the prior composite reading was 51.7 and prior manufacturing was 52.5, with the outlet noting that subdued business confidence and high costs continued to discourage hiring.
The commentary said output growth across manufacturing and services has slowed to a pace consistent with the economy growing at only a 0.1% quarterly rate, with growth, confidence, and employment constrained by high energy prices, higher borrowing costs, geopolitical worries, and uncertainty around government policy ahead of the autumn Budget.
Forexlive added that the market reaction was muted because the data did not change the Bank of England outlook, with the central bank previously flagging growth risks from a softer labor market while also acknowledging inflation risks tied to the Iran war and elevated energy prices. It also noted that future attention will likely center on the Middle East as oil prices remain a key driver of inflation and rate hike expectations.