Summary
- Latest data released by S&P Global - 23 October 2026
- Prior 52.1
- Manufacturing PMI 52.8 vs 51.7 expected
- Prior 51.9
- Composite PMI 53.1 vs 51.8 expected
- Prior 52.0
Business activity growth accelerates to its fastest since February, helped by rebound in new orders
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence:
“The UK economy has picked up momentum in October, with early PMI data indicating the strongest rate of growth since February. This encouraging sign of economic resilience is underscored by firms taking on additional workers for the first time since hiring was hit by the 2024 Autumn Budget.
"There are reports of paused spending due to a lack of clarity on domestic economic policy in the run up to the Budget, meaning the promising economic picture from the latest PMIs should provide an encouraging base for further robust economic growth through the winter months, barring any adverse surprises to businesses in the tax and spending review.
"Geopolitics, and notably the potential for conflicts in the Middle East and Ukraine to add to energy market volatility, are, however, clearly still unsettling many businesses, and cost of living concerns and broader fiscal worries are being compounded by the shift to higher borrowing costs.
"Price pressures remain worryingly elevated, not only making a rate hike from the Bank of England at its upcoming policy meeting a near certainty but also likely shortening the odds of further rate hikes into 2027.”
The UK economy showed renewed strength in October, with the Composite PMI rising to 53.1 from 52.0 in September, its highest level since February. Business activity accelerated across both manufacturing and services, while new orders expanded at the fastest pace in 25 months and employment returned to growth for the first time since September 2024.
This contrasts with the loss of momentum across the eurozone. The divergence in economic performance has been supporting the british pound against the euro, with EUR/GBP extending the decline after the positive UK PMIs.
The data also reinforces expectations for BoE rate hikes as the central bank will have to lean against the inflationary pressures. Input cost inflation accelerated to its strongest pace since June, driven largely by higher energy prices. Although prices charged by businesses increased at a slightly slower pace, the resilient economic activity, stronger new orders and renewed employment growth gives the BoE less room to be patient and look through the shock.
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