Latest data released by Markit/CIPS - 23 October 2020
- Prior 56.1
- Manufacturing PMI 53.3 vs 53.1 expected
- Prior 54.1
- Composite PMI 52.9 vs 54.0 expected
- Prior 56.5
Overall business activity continued to expand this month but the pace has considerably slowed down relative to what we have seen in the past few months, with all three readings noted above falling to a respective four-month low.
The softer conditions are linked to renewed virus restrictions and also shrinking demand, with job cuts still persisting as the furlough scheme is set to expire next week.
Markit notes that:
"The pace of UK economic growth slowed in October to the weakest since the recovery from the national COVID-19 lockdown began. Not surprisingly the weakening is most pronounced in the hospitality and transport sectors, as firms reported falling demand due to renewed lockdown measures and customers being deterred by worries over rising case numbers.
"The slowdown would have been even more pronounced had it not been for exports rising as overseas customers sought to secure orders before potential supply disruptions as Brexit draws closer.
"The slower growth of output, the renewed fall in demand and further deterioration in the labour market suggest the economy started the fourth quarter on a weakened footing. While Brexit preparations may cause a short-term boost to some parts of the economy ahead of 31st December, rising COVID-19 cases and the imposition of local lockdown measures bode ill for the near-term economic outlook. While the fourth quarter still looks likely to see the economy expand, the rate of growth looks to have slowed sharply and the risk of a renewed downturn has risen."
Not much of a reaction in the pound as cable is still hovering close to 1.3100, just off earlier highs of 1.3113 as the dollar is keeping softer on the session.
