UK Business Activity Slows as Inflation Pressure Rises
UK business activity slowed down in September as inflation pressure intensified, according to a survey by S&P Global. The S&P Global UK Services Purchasing Managers' Index (PMI) dropped to 51.7 from 52.5 in August, marking a three-month low.
The services sector, which accounts for the majority of Britain's economy, saw prices rise at their fastest pace in four months. Companies also reported accelerating cost pressures due to increased energy costs stemming from the conflict in Iran.
S&P Global's chief business economist, Chris Williamson, noted that September has seen a 'worrying combination' of slow economic growth and rising inflationary pressures. The survey suggests quarterly economic growth of around 0.1%, down from 0.4% in the second quarter.
The Bank of England may raise interest rates on November 5, given the current inflationary pressures, with financial markets indicating a roughly 60% chance of a rate hike.