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  • Prior 49.5
  • Manufacturing PMI 44.2 vs 43.0 expected
  • Prior 43.0
  • Composite PMI 46.8 vs 48.7 expected
  • Prior 48.6

The BOE did mention that they had gotten a glimpse of the data here and with the services reading falling to a 32-month low, you can understand more on why they decided to pause yesterday. It’s a big miss on estimates and the manufacturing slump is also still continuing with the reading still in contraction territory. S&P Global notes that:

“The disappointing PMI survey results for September
mean a recession is looking increasingly likely in the UK.
The steep fall in output signalled by the flash PMI data is
consistent with GDP contracting at a quarterly rate of over
0.4%, with a broad-based downturn gathering momentum
to hint at few hopes of any imminent improvement.

“Underscoring the severity of the UK’s deteriorating
situation, September’s downturn is the steepest since the
height of the global financial crisis in early 2009 barring
only the pandemic lockdown months.

“The survey had warned that a revival of growth in the
second quarter looked unsustainable, and the third quarter
is indeed seeing a mounting toll on the economy from the
reality of the increased cost of living and the recent rapid
rise in interest rates.

“Despite higher fuel prices during the month, firms’ costs
grew at a sharply reduced rate overall which, combined
with collapsing pricing power amid weak demand, looks
set to take further pressure off inflation in the coming
months.

“A major concern in the inflation outlook has been wage
growth, but with the survey now signalling the sharpest fall
in employment since 2009, wage bargaining power is
being eroded rapidly.

“With the Bank of England having had sight of the survey
data prior to its latest policy decision, the worrying signals
from the survey of heightened recession risk and cooling
inflationary pressures are likely to have added to calls to
halt rate hikes.”

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