Manufacturing sector activity contracted for the first time in six months in October as uncertainty around the Budget hit.
S&P Global reported on Friday that its manufacturing purchasing managers index (PMI) fell to 49.9 this month, from 51.5 in September.
This marked the first time the index had sat below the neutral 50-point mark since April, as a reduction in new orders caused output to slow.
“UK manufacturing started the final quarter of the year on an uncertain footing amid speculation on government policies ahead of the Budget,” S&P director Rob Dobson said.
“This domestic headwind, combined with an ongoing loss of export business, led to the first outright contraction in new work intakes since April.”
Output ticked up in the consumer and investment goods sector, S&P added, but fell in the intermediate goods category.
Confidence among businesses recovered “slightly” from a nine-month low in September in the meantime, while inflation across the sector subsided to its slowest rate in ten months.
“This may provide some headroom for policymakers to support growth if demand weakens,” Dobson added.
“The November PMI will be especially keenly anticipated to see the near-term impact of the Budget on business conditions and in particular the effect on confidence.”