Published : 11 months ago, on 01/11/2023

UK factories struggle in October in latest downturn sign – PMI

LONDON (Reuters) – Britain’s factories suffered a worse October than previously thought, according to a survey published a day before the Bank of England is expected to restate its intent to keep interest rates high, despite widespread signs of an economic slowdown.

The final reading of the S&P Global/CIPS manufacturing Purchasing Managers’ Index (PMI) stood at 44.8, down from an early estimate of 45.2.

Although the main activity index was up from 44.3 in September, the output component contracted for an eighth consecutive month, the longest such run since the global financial crisis of 2008-09.

“Difficult and uncertain market conditions led to increased caution among both manufacturers and their clients alike,” survey compiler S&P Global said.

Customers at home and abroad cut back on orders, manufacturers shed staff and a measure of optimism in the sector fell to its lowest this year.

In one positive sign for the BoE, prices paid by factories fell for a sixth month in row and selling prices also declined, suggesting a further weakening of some of the inflation pressure in the British economy.

The BoE is expected to keep Bank Rate at 5.25% on Thursday – its second no-change decision after 14 consecutive increases – as it seeks to counter the dangers to the economy from an inflation rate that remains more than three times its 2% target.

(Reporting by William Schomberg; Editing by Christina Fincher)