UK Factory Inflation Pressures Rise as Output Slows

UK factories reported growing inflation pressures in September, bucking a four-month trend of declining costs. The S&P Global Purchasing Managers' Index (PMI) showed that input costs increased for the first time since May, while prices charged by manufacturers also picked up speed.

The survey's headline reading rose to 51.9 from 51.7 in August, but its output gauge slowed to 51.5 from 52.1, marking a second consecutive monthly slowdown.

Investors are now expecting the Bank of England to raise interest rates in November due to warnings from Governor Andrew Bailey and other officials that the energy spike caused by the Iran war threatens to stoke broader inflation.

Despite this, employment in the manufacturing sector expanded for the sixth consecutive month, driven by improved new orders and a desire to reduce backlogs of work.