UK businesses report fastest growth since February in October survey

UK business activity grew at its fastest pace since February in October, helped by a rebound in new orders, according to S&P Global’s preliminary survey. The composite purchasing managers’ index (PMI) rose to 53.1 from 52.0 in September and exceeded forecasts.

The PMI is a survey measure of business activity, not a measured growth rate for gross domestic product—the economy’s total output.

Hiring returns, but demand remains uneven

Chris Williamson, chief business economist at S&P Global Market Intelligence, said businesses were adding workers for the first time since hiring fell after the autumn 2024 budget.

Some surveyed businesses linked stronger sales to investment in artificial intelligence (AI) and rising demand for technology services. Others reported that geopolitical uncertainty and weak consumer confidence were affecting sales. Demand was particularly weak in construction and real estate, the survey found.

Analysis

Williamson forecasts higher interest rates

Williamson said price pressures remained elevated and higher borrowing costs were adding to businesses’ cost-of-living and fiscal concerns. He judged a Bank of England interest-rate increase at its upcoming policy meeting a near certainty and said further increases into 2027 were becoming more likely. Those are his forecasts, not an announced Bank decision.