UK Private Sector Growth Softens

(RTTNews) - The UK private sector growth moderated to a three-month low in September, reflecting a loss of momentum in manufacturing and service sectors, flash data from S&P Global showed Wednesday.

The headline composite output index fell to 51.7 in September from 52.5 in August. This was the lowest since June and below forecast of 52.0.

Service providers cited subdued domestic economic conditions and ongoing geopolitical uncertainty as factors constraining activity growth. Manufacturers reported weak consumer demand as a growth headwind.

The services Purchasing Managers' Index declined to 51.7 in September from 52.5 in the previous month. The score was forecast to drop to 52.0.

The manufacturing PMI posted 52.0, up from 51.7 in August. The reading was expected to fall to 51.5.

"While the upturn in the survey's price gauges suggest the Bank of England looks likely to keep a hawkish bias, the worryingly lacklustre pace of business growth underscores the risk to the economy from higher borrowing costs," S&P Global Market Intelligence Chief Business Economist Chris Williamson said.

Total new work across the private sector economy dropped fractionally in September, mostly reflecting a renewed downturn in new business volumes at service sector companies. There was a moderate fall in export sales.

Employment numbers dropped in September, which marked two years of continuous job losses.

There was a steep and accelerated increase in average cost burdens at private sector companies, with the rate of inflation hitting a three-month high. The increase was largely driven by higher fuel prices.

Despite rising inflationary pressures and weaker demand patterns, data showed that overall business optimism was unchanged from August's six-month high.