Business Conditions Show Mixed Signals Amid Ongoing Uncertainty

The Bank of England's Agents' summary of business conditions in September 2026 shows mixed signals. While some sectors have seen improved output growth, mainly in certain business services and manufactured exports, there are still significant pockets of weakness.

Consumer spending remains subdued, with weak food sales volumes at supermarkets and low demand for big-ticket items such as furniture. However, new car sales continue to recover, driven by Chinese imports.

The cumulative average pay settlement for 2026 has ticked up from 3.5% to 3.6%, but this small change is mainly due to new information on April settlements rather than recent deals. There's little expectation of an imminent improvement in the sectors with weakness.