UK firms grow at the fastest pace in eight months but an economist warns a rate hike is near-certain

UK firms added to their headcounts for the first time since the 2024 Autumn Budget depressed employment, according to S&P Global's flash survey. The composite PMI rose to 53.1 for October, up from 52 and well above the 51.7 economists had pencilled in. New orders grew at the fastest rate since September 2024. Chris Williamson, chief business economist, observed that some firms had delayed spending until they had clarity on what the Budget would bring.

Services hit an eight-month high of 53.1, while manufacturing climbed to 52.8 from 51.9.

Several firms pointed to AI investment and demand for tech services as drivers of stronger sales.

Williamson warned that 'price pressures remain worryingly elevated' and that further rate rises could follow into 2027.