Flash of ‘hope’ ahead of Budget as manufacturing roars back to life
The UK economy had a flash of “hope” in October after manufacturing roared back to life ending a year-long slump.
The latest ‘flash’ PMI from S&P Global showed business activity jumped to a two-month high at 51.1, this was up from 50.1 in September.
The growth was driven by a sharp uptick from the manufacturing sector which hit a 13 month high at 51.2, surging from 45.7 just a month prior.
However, the economy remained fragile holding just above the 50 mark which indicates a sector is growing.
Chris Williamson, chief business economist at S&P, said: “October’s flash UK PMI survey brings hope that September was a low point for the economy from which business conditions are starting to improve.
“Output has picked up, with a particularly welcome return to growth for manufacturing for the first time in over a year accompanied by an upturn in demand for services, notably among consumers.”
Williamson said job losses had “moderated” whilst inflationary pressures came “back to levels consistent” with the Bank of England’s two per cent.
Jaguar Land Rover hands economy boost
The return to activity from Jaguar Land Rover (JLR) after a cyber attack crippled operations served as a “helping hand”.
JLR was forced to halt production for five weeks from 1 September which has been estimated to have cost the UK around £1.9bn.
According to research from the Cyber Monitoring Centre (CMC), a non-profit group that tracks major cyber incidents, found that around 5,000 organisations across the country were affected by the fallout of the attack
Jaguar Land Rover only partially restarted UK operations earlier this month and is not expected to fully recover until January 2026.
Despite the bump in manufacturing, Williamson warned goods exports continued to fall “at a worryingly steep rate” due to the US tariff offensive.
President Donald Trump has continued his attacks on trading partners throughout the government shutdown with a threat this month to slap an additional 100 per cent tax on Chinese imports by 1 November.
Elsewhere, Williamson said companies were “treading cautiously” ahead of the autumn Budget, where Rachel Reeves is expected to raise taxes to the tune of £30bn.
He added the outcome of the next fiscal event would “sway the business mood in the months ahead”.