UK firms struggle as economic uncertainty mounts - PMI
By Abigail Townsend
Date: Tuesday 23 Sep 2025
(Sharecast News) - The UK's private sector faltered in September, a closely-watched survey suggested on Tuesday, weighed down mounting economic uncertainty and slowing growth in the dominant services industry.
The latest flash S&P Global UK PMI composite output index slowed to 51.0 in September, down from 53.4 in August and a four-month low.
Analysts had pencilled in a far more modest decline, to 53.0.
A reading below the neutral 50.0 indicates contraction, while one above it suggests growth.
Within that, the hard-pressed manufacturing sector remained in negative territory. The output index fell to 45.4 from 49.3 - a six-month low - while the manufacturing PMI shed 0.8 points at 46.2.
Respondents flagged lower output across the automotive supply chain, following stoppages at Jaguar Land Rover.
The luxury car group, the UK's biggest car maker, has been forced to temporarily shutter production since late August, after being hit by a cyber-attack.
The services sector, meanwhile, remained in positive territory. But growth slowed notably.
The PMI business activity index fell to 51.9, from 54.2, a two-month low. Consensus had been for 53.5.
Service providers noted that while both business and consumer spending rose during the month, growth had been constrained by "lacklustre" UK economic conditions and heightened geopolitical uncertainty.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said: "September's flash survey brought a litany of worrying news, including weakening growth, slumping overseas trade, worsening business confidence and further steep job losses.
"With the weakening of business activity growth to a rate consistent with the economy almost stalling, and around 50,000 job losses being signalled by the PMI in the three months to September, alarm bells should be ringing that the economy is faltering."
Matt Swannell, chief economic advisor to the EY Item Club, said: "Having looked implausibly strong in August, it was no surprise that the flash composite PMI fell back.
"Growth will likely be modest over the next few quarters, as consumer spending power is squeezed, taxes are increased again and a substantial minority of households continue to refinance their mortgages onto much higher interest rates."
The Bank of England last cut interest rates in August, by 25 basis points to 4%.
But it left them on hold this month, and commentators are now split as to whether it will cut again this year, with persistently sticky inflation at 3.8% and food price inflation at 5.1%.
Chancellor Rachel Reeves, meanwhile, is increasingly expected to hike taxes in at her November Budget, as she battles a sluggish economy alongside soaring government spending and record borrowing.
The composite PMI is a compiled from responses to surveys sent to around 650 manufacturers and 650 service providers. Data were collected between 11 and 19 September.
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