UK private sector growth slipped to an 11-month low in October, according to the latest UK PMI published this morning. The Flash UK PMI Composite Output Index came in at 51.7, down from 52.6 in September. Commenting on the data, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said: “Business activity growth has slumped to its lowest for nearly a year in October as gloomy government rhetoric and uncertainty ahead of the Budget has dampened business confidence and spending.” Experts agreed, with one saying: “It’s plain and simple: businesses do not like uncertainty and it’s fair to say that the upcoming Autumn Budget has plenty of business owners on tenterhooks as they nervously await Labour to confirm the damage.”
what the experts say...
Tony Redondo
Forex Expert
Founder at Cosmos Currency Exchange
"The drop in UK private sector growth to an 11-month low is significant. This PMI report reflects deep and growing concerns among businesses ahead of the Budget. Geopolitical tensions in the Ukraine and Middle East, coupled with the upcoming US elections on 5 November further compound this uncertainty. As business confidence is crucial for investment and spending, this hesitancy could see a continued impact on UK economic growth."
Wes Wilkes
Wealth Manager
CEO at Net-Worth NTWRK
"No need for UK business owners to look behind to see who's pushing them off the cliff this time. With things already slowing for UK firms, the Government are set to hit us all with the big boot of a painful Budget to make sure we fall off. Buckle in folks, as halloween is going to be all tricks and no treats this year."
Gabriel McKeown
Economics Expert
Head of Macroeconomics at Sad Rabbit Investments
"With a near-endless stream of ominous rhetoric from the new government, warning of "tough decisions" and a "painful" budget, it is no surprise that this uncertainty has contributed to the recent slump in private sector growth, as reflected in the latest PMI data falling to an 11-month low. The spectre of a stringent budget has significantly dented consumer and business confidence across the UK, with confidence among companies falling to its lowest point since the election. Concerns over the forthcoming budget’s fiscal strategy have left many firms in a state of limbo, delaying investment and hiring decisions as they await clarity on policy. Speculation is rife that the budget will include tax hikes on capital gains and national insurance, further hampering the weakened private sector. As Reeves sharpens her fiscal scalpel, the government must weigh the trade-offs between immediate fiscal needs and long-term economic vitality, as a tax hike today could be a growth gamble tomorrow."
David Belle
Trader
Founder at Fink Money
"Is there any surprise to this? The Labour government absolutely hate the private sector, even though they want more of the private sector’s taxes — where ALL tax revenue comes from. They seem to think the public sector adds productivity when, in fact, it has stagnated for the last 30 years. There is no wonder so many entrepreneurs, including myself, are looking to move away to places which are at least cheaper for a higher quality of life, and a place where the government actually respects you for adding to the economy. This government has 13 people who have worked in the private sector outside of activist law, comms or political PR. Enlightening."
Sam Kirk
Manufacturer
Managing Director at J-Flex Rubber Products
"It's plain and simple: businesses do not like uncertainty and it's fair to say that the upcoming Autumn Budget has plenty of business owners on tenterhooks as they nervously await Labour to confirm the damage. That's the same Labour who, back in February, proudly exclaimed that they are the "party of business". I'm beginning to wonder which businesses they're referring to."
