UK: S&P Manufacturing PMI slumps to 45.8 in October vs. 48 expected

• Private sector's business activity continued to contract in the UK.
• GBP/USD fell toward 1.1300 with the initial reaction, erasing its daily gains.

The economic activity in the UK's private sector continued to contract at an accelerating pace in early October with the S&P Global/CIPS Composite PMI dropping to 47.2 from 49.8 in September. 

The Manufacturing PMI declined to 45.8 from 48.4 and the Services PMI fell to 47.5 from 50 in the same period. Both of these prints fell short of analysts' estimates.

Commenting on the findings of the survey, "no great surprise seeing the manufacturing and services sectors backsliding again in October given the jangled nerves amongst cash-strapped businesses facing a faltering economy, political turmoil and historically high input costs," said Dr John Glen, CIPS Chief Economist.

"These challenges have spooked consumers and businesses alike into the biggest fall in demand for goods and services since January 2021, from both domestic and overseas markets," Dr Glen further elaborated.

Market reaction

GBP/USD came under renewed bearish pressure with the initial reaction and turned flat on the day near 1.1300.