Business activity in the UK private sector fell at its fastest rate since the global financial crisis - excluding the pandemic - according to latest figures.
The headline seasonally adjusted S&P Global/CIPS Flash UK composite output index registered 46.8 in September, down from 48.6 in August, to signal the fastest reduction in output since the lockdown period in January 2021.
Aside from pandemic disruptions, the drop was the steepest since March 2009.
Dr John Glen, CIPS chief economist, said: “Policymakers are likely to feel concerned at this month’s figures which echoed survey records seen in the last economic crash over a decade ago."
The Bank of England saw these figures before announcing its interest rate pause on Thursday.
The @SPGlobal @cipsnews #UK Flash #PMI fell to 46.8 in September (Aug: 48.6) to signal the sharpest contraction in private sector activity since the financial crisis when excluding lockdown-hit months: https://t.co/0gOgNWh3xF
Find out about the PMIs: https://t.co/9s02gyxV9S pic.twitter.com/5u6y30K86L
— S&P Global PMI™ (@SPGlobalPMI) September 22, 2023
S&P said the loss of momentum reflected a steeper drop in service sector activity than seen during August, which more than offset a slower decrease in manufacturing production.
The flash UK Services PMI business activity index fell to 47.2 from 49.5 in August, a 32-month low, although the flash UK manufacturing output index climbed to 44.6 from 44.1 in August, a two-month high.
Weaker demand due to cost-of-living pressures and higher borrowing costs were cited by survey respondents, alongside cutbacks to spending among clients in the real estate and construction sectors.
Some manufacturers suggested that customer destocking had acted as a brake on their output requirements.
There was better news on pricing with input price inflation seeing its largest monthly fall so far in 2023, despite widespread reports citing pressure on costs from higher fuel bills.
A combination of weak demand and lower cost inflation contributed to the slowest increase in average prices charged by private sector companies since February 2021.