Copy article

UK PMI "reflects deep and growing concerns among businesses ahead of the Budget"

ended 24. October 2024

UK private sector growth slipped to an 11-month low in October, according to the latest UK PMI published this morning. The Flash UK PMI Composite Output Index came in at 51.7, down from 52.6 in September. Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said: “Business activity growth has slumped to its lowest for nearly a year in October as gloomy government rhetoric and uncertainty ahead of the Budget has dampened business confidence and spending. Companies await clarity on government policy, with conflicts in the Middle East and Ukraine, as well as the US elections, adding to the nervousness about the economic outlook."

Newspage asked experts for their thoughts, below.

6 responses from the Newspage community

Copy all

Star Quote
Copy

Editor
Tony RedondoVerified
Founder at Cosmos Currency Exchange
The drop in UK private sector growth to an 11-month low is significant. This PMI report reflects deep and growing concerns among businesses ahead of the Budget. Geopolitical tensions in the Ukraine, in the Middle East, and the upcoming US elections on 5 November further compound this uncertainty. As business confidence is crucial for investment and spending, this hesitancy could see a continued impact on UK economic growth. This, in turn, may prompt a more cautious approach from the Bank of England regarding future interest rate decisions, especially if they prioritise supporting economic stability.
Copy

Editor
Wes WilkesVerified
CEO at IronMarket Wealth
No need for UK business to look behind to see who's pushing us off the cliff this time. Just as things look to be slowing for UK businesses, the Government are set to hit us all with the big boot of a painful Budget to make sure we fall off. Buckle in folks, as halloween is going to be all tricks and no treats this year.
Copy

Editor
Gabriel McKeownVerified
Head of Macroeconomics at Sad Rabbit - Substack Newsletter
With a near-endless stream of ominous rhetoric from the new government, warning of "tough decisions" and a ‘painful’ budget, it is no surprise that this uncertainty has contributed to the recent slump in private sector growth, as reflected in the latest PMI data falling to an 11-month low. The spectre of a stringent budget has significantly dented consumer and business confidence across the UK, with confidence among companies falling to its lowest point since the election. Concerns over the forthcoming budget’s fiscal strategy have left many firms in a state of limbo, delaying investment and hiring decisions as they await clarity on policy. Speculation is rife that the budget will include tax hikes on capital gains and national insurance, further hampering the weakened private sector. As Reeves sharpens her fiscal scalpel, the government must weigh the trade-offs between immediate fiscal needs and long-term economic vitality, as a tax hike today could be a growth gamble tomorrow.
Copy

Premium
David BelleVerified
Founder and Trader at Fink Money
Is there any surprise to this? The Labour government absolutely hate the private sector, even though they want more of the private sector’s taxes — where ALL tax revenue comes from. They seem to think the public sector adds productivity when in fact, it has stagnated for the last 30 years. Yes, it’s harder to measure public sector productivity than that of the private sector, but the irony is because there is no profit motive. Which indicates if you have a price mechanism/signal, it tends to mean resources are allocated better outside of public goods of course (not everything we have now is or should be a public good). There is no wonder so many entrepreneurs, including myself, are looking to move away to places which are at least cheaper for a higher quality of life, if not a place where the government actually respects you for adding to the economy. This government has 13 people who have worked in the private sector outside of activist law, comms or political PR. Enlightening.
Copy

Oliver Bryant0
Co Owner at Tokyo Nights
Tories traditionally help big businesses and Labour support the working people. We’re stuck in the middle not benefitting from either camp. I think the Budget will negatively impact my business.
Copy

Sam KirkVerified
Managing Director at J-Flex Rubber Products
It's plain and simple: businesses do not like uncertainty and it's fair to say that the upcoming Autumn Budget has plenty of business owners on tenterhooks as they nervously await for Labour to confirm the damage. That's the same Labour who, back in February, proudly exclaimed that they are the "party of business". I'm beginning to wonder which businesses they're referring to.