The UK's private sector experienced a significant rebound in October, marking its strongest monthly performance so far this year, according to fresh economic data.
Strong Recovery Across Key Sectors
New figures from accountancy firm BDO reveal that overall output climbed to 97.49 in October, rising notably from 96.25 recorded in September. This represents the most substantial monthly improvement since December 2024.
The services sector played a crucial role in this uplift, benefiting from easing cost pressures and lower-than-anticipated inflation which boosted consumer demand. Meanwhile, manufacturing output jumped to 94.14 from 92.64, achieving its largest single-month gain since April.
Manufacturers received additional support from clarified trade agreements with India and the United States, alongside the resumption of operations at Jaguar Land Rover following disruptive cyber attacks earlier in the year.
Budget Nerves Threaten Growth Momentum
Despite these positive indicators, business confidence remains fragile due to ongoing speculation surrounding the upcoming Autumn Budget. Scott Knight, Head of Growth at BDO, commented: "Businesses remain stuck in wait mode as nerves around the Autumn Budget weigh on confidence."
Knight emphasised that after months of policy testing, UK businesses urgently require clarity before committing to significant growth investments.
Employment Shows Tentative Improvement
In a promising development, BDO's employment index ended its five-month decline, edging upward to 93.95. This marks the first positive movement in employment indicators since earlier this year.
However, this slight improvement occurs against a backdrop of rising unemployment, which reached 4.8 per cent in the three months to August. Business owners continue to express concern about potential business rate increases scheduled for 26 November, following last year's £20 billion tax hike from increased national insurance and minimum wage contributions.
Knight concluded: "With the right signals from the Government, businesses can confidently move forward, but for now the mood music remains subdued."
