UK Manufacturing and Services Show Tentative Growth Amid Inflation Easing

Multiple surveys indicate that the UK economy may be at a turning point, showing tentative signs of recovery in October, driven by a rebound in the manufacturing sector and easing inflation pressures. The S&P Global Composite Purchasing Managers' Index (PMI) rose to 51.1 in October from 50.1 in September, signaling modest growth after a period of stagnation, with manufacturing PMI reaching a 12-month high at 49.6. The recovery was partly attributed to the resumption of production at Jaguar Land Rover, which had been disrupted by a cyberattack, alongside an upturn in demand for services and slightly improved business confidence. Despite these positive signs, the overall pace of growth remains sluggish, consistent with an estimated GDP growth of around 0.1%, and firms remain cautious about spending, investment, and hiring ahead of the upcoming government budget. Inflationary pressures have moderated, aligning closer to the Bank of England's 2% target, and job losses have slowed, although business confidence remains subdued. The economic outlook is influenced by ongoing uncertainties including the impact of U.S. trade tariffs and anticipated tax changes from the UK government budget.