span>span>Wednesday 5th October /span>span>2022/span>span> - 09:47 (BST)/span>/span>
The UK IHS Markit/CIPS Services Purchasing Managers’ Index (PMI) for September showed that the sector unexpectedly returned to expansion territory. With a reading of 50 and driven by the weaker pound, exports of financial and travel services grew significantly throughout the month.
Private sector contraction was also reversed, with a figure of 49.1 posted versus 48.4 during August. This was helped by the return of European demand following the regions traditional summer hiatus.
Conversely, the S&P Global/CIPS Manufacturing Purchasing Managers’ Index (PMI) sank to 48.4 in September, the third-consecutive monthly fall and driven by weaker global demand from both the US and China.
Recent sterling weakness has also raised the cost of imports of fuel and raw materials - which are often priced in dollars - and the PMI showed that input cost inflation rose for the first time in five months, partly due to the weaker pound.
The news follows a dramatic u-turn by the Conservative party regarding tax elements of its recent mini-budget aimed at stimulating economic growth. This, along with further commitment from the Bank of England to ensure UK financial stability, has seen GBP partially recover from last weeks sharp fall.
