UK private sector growth slows to three-month low as inflation pressures rise

According to the latest flash PMI, the UK private sector continued to expand for a third consecutive month, but the growth rate slipped to 51.7 in September, the lowest reading since June. The index, which blends manufacturing and services data, still sits above the neutral threshold, indicating overall expansion. Analysts attribute the slowdown to a mix of stubbornly high energy prices, rising operational costs, and lingering geopolitical tensions, especially the war involving Iran.

Chris Williamson of S&P Global Market Intelligence highlighted that the broader economy is now growing at an estimated 0.1% quarterly rate, with business confidence and hiring prospects constrained by borrowing costs and policy uncertainty ahead of the upcoming Budget. The report underscores the challenge of sustaining growth while inflationary pressures persist.