The UK composite index remained slightly above the 50 percent threshold in October and below the consensus range for the economy; however, the growth experienced a second consecutive month of slowdown, plummeting to 51.7, and the lowest level in 11 months. This deceleration was observed in the manufacturing and service sectors, as new business was impeded by economic uncertainty and client hesitancy, particularly in the lead-up to the Autumn Budget. Employment experienced its first decline in 2024, with the service sector being the primary contributor. Also, price inflation intensified, as businesses increased their prices to offset the increasing costs of wages and technology services.

In contrast, the service sector demonstrated greater resilience, as export sales experienced their most rapid expansion since March 2023. Conversely, manufacturing witnessed its most significant decline in export orders in eight months. Firms expressed concerns over political uncertainty and subdued economic growth prospects, leading to a resultant weakening in business confidence for the third month in a row. This latest update takes the RPI to minus 20, below market consensus and the RPI-P to 2, within the consensus of the UK economy.

The UK PMI composite index is expected to rise to 52.7, signaling the expansion of the industry similar to that of September. The manufacturing index is expected to rise to 51.7, expanding again but at a faster pace than seen in September where the manufacturing index then was at 51.5. The services index is expected to hold steady at 52.4. The PMI composite Flash for the UK is expected to expand all round.

The flash Composite Purchasing Managers’ Index (PMI) provides an early estimate of current private sector business activity by combining information obtained from surveys of the manufacturing and service sectors of the economy, around 650 companies in each case. The flash data are released around ten days ahead of the final report and are typically based upon around 75-85 percent of the full survey sample. Results covering a range of variables including manufacturing output, employment, new orders, backlogs and prices are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) activity versus the previous month and the closer to 100 (zero) the faster is activity growing (contracting). The report also contains flash estimates of the manufacturing and services PMIs. The survey is produced by S&P Global.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' surveys, investors will know what the economic backdrop is for the various markets. The flash PMIs are particularly closely watched as they provide a wide ranging look at economic developments and some of the most up to date information available. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.