Rachel Reeves was handed a tantalising lifeline today as a closely-watched index showed the UK economy coming off rock bottom.
Provisional PMI figures suggested the private sector reviving this month, as manufacturing increased for the first time in a year. Job losses also look to have slowed.
Industry was partly boosted by the resumption of production at Jaguar Land Rover after the car giant’s factory shutdown, caused by a major cyber attack.
The S&P Global flash UK composite PMI gave a reading of 51.1 for October, rising from 50.1 in September. Any score above 50 represents growth.
The latest level was slightly stronger than the 50.7 analysts had pencilled in.
The potential upturn might not help Ms Reeves at the Budget, as much of the Office for Budget Responsibility’s work is already under way.
The S&P Global flash UK composite PMI gave a reading of 51.1 for October, rising from 50.1 in September. Any score above 50 represents growth
The potential upturn might not help Ms Reeves at the Budget, as much of the Office for Budget Responsibility’s work is already under way
But Chris Williamson, chief business economist at S&P Global Market Intelligence, 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.
‘Business confidence has also brightened slightly, job losses have moderated, and inflationary pressures are coming back to levels consistent with the Bank of England’s 2 per cent target.’
The research highlighted a slight improvement in activity in the services sector but surveyed firms said this was still ‘sluggish’ in the face of subdued consumer sentiment and business caution ahead of the autumn budget.
Meanwhile, manufacturers reported the fastest upturn in production since September last year.
Firms said there were still some challenges related to the factory shutdown at JLR but others highlighted they had benefitted from the phased restart at the firm’s manufacturing sites.
October’s data also indicated that private sector job losses eased to the lowest level since May.
Cost inflation slowed for the second consecutive month, easing to its lowest level since last November.
