Optencis
UK businesses had their best month since February in October, according to early purchasing managers' index (PMI) surveys from S&P Global published at 08:30 UTC on 23 October 2026. The flash composite PMI, which combines services and manufacturing, climbed to 53.1 from 52.0 in September, well above the 51.8 that forecasters had pencilled in. Reuters and investingLive both reported the stronger-than-expected readings.
What the October survey showed
Both halves of the economy beat expectations. The services index, which covers the bulk of UK activity, came in at 53.1 against a forecast of 51.8 and a September reading of 52.1. The manufacturing index reached 52.8, compared with 51.7 expected and 51.9 the month before. Any reading above 50 means more firms reported growth than decline, so all three indices point to an economy that is expanding and gathering pace.
Orders, hiring and costs
The details were as encouraging as the headline. Order books grew at a rate not seen in 25 months, which suggests the pickup in activity has some support behind it. Headcounts also rose, something the survey had not recorded since September 2024, after hiring was hit by the 2024 Autumn Budget. On the price side, the picture was less comfortable. Costs paid by firms climbed at the quickest rate since June, with energy the main driver, while the prices businesses charged their customers rose a little less quickly than before.
Why the Bank of England is in focus
A PMI matters to traders because it arrives weeks before official growth figures and gives an early read on demand, jobs and prices. Here, firm activity combined with rising costs leaves the Bank of England (BoE) with less reason to look through the recent energy shock. investingLive noted that the data reinforces market expectations of BoE rate increases, meaning higher policy rates, the interest rate the central bank sets. The survey compiler also flagged worries: firms cited unclear domestic policy ahead of the Budget, the cost of living, fiscal concerns and higher borrowing costs, as well as the risk that conflicts in the Middle East and Ukraine add to swings in energy markets.
- 1Higher energy pricesMain driver of firms' costs
- 2Input costs climbQuickest increase since June
- 3Price pressures persistSurvey shows elevated cost inflation
- 4BoE in focusRate hike expectations reinforced
He sees the survey as a sign of resilience, but says persistent price pressures make a Bank of England hike at its next meeting close to certain and raise the chance of more in 2027.
Views reported by the sources, not Optencis opinions.
A contrast with the euro area
The UK figures stood in contrast to the euro area flash PMI released earlier the same morning, which showed momentum fading across the eurozone. investingLive said this gap in economic performance has been a theme for the pound against the euro, and reported that EUR/GBP extended an earlier decline after the UK release. For traders following European currencies, the two sets of surveys together offer a snapshot of how differently the two economies are moving this autumn.
Sources: investingLive, Reuters.
