October 24, 2024 08:37 GMT
UK DATA: PMI lower than expected; but firms pass on cost increases
UK DATA
UK PMI came in a little lower than expected across both manufacturing and services - but remained above 50 for both. And on the price side firms reported that they were passing on cost increases - so that will be a concern from the MPC (particularly if growth concerns pick up).
- Given that there is budget uncertainty clouding this number - with new orders down on uncertainty - we don't think that this number is as negative as it first appears, and are not convinced it will really increase the probability of sequential cuts.
Highlights from the press release:
- "Private sector firms indicated another robust rise in their average prices charged. Moreover, the rate of prices charged inflation edged up to a three-month high. Cost pressures receded again, as the latest increase in average input prices was the slowest since November 2020."
- "The latest survey indicated a strong increase in average cost burdens across the private sector economy, but the rate of inflation eased to its lowest for 47 months. Survey respondents noted decreased fuel costs and some instances of falling commodity prices. Where higher input costs were reported, this mostly reflected increased salary payments and rising prices paid for technology services. Businesses once again sought to alleviate pressure on margins by increasing their average prices charged. The latest survey indicated a robust rise in output charges, with the rate of inflation the highest since July."
- "Latest data also pointed to divergent export sales trends, with service providers signalling the fastest growth since March 2023 whereas goods producers indicated the sharpest decline in new work from abroad for eight months."
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