Chris Cheverall, head of UK at CMC Markets, knows businesses are finding things tough after growth across Britain’s private sector slowed to a three-month low in September.
He said: “Today’s PMI is uncomfortable because businesses are being squeezed from both directions: growth is slowing while costs are still rising.
“For markets, that makes the UK outlook much more complicated than a simple weak-growth story.
“There are still pockets of resilience, as manufacturing appears to be recovering more strongly than services, which suggests the economy is not weakening uniformly and gives some support to the idea that activity can continue to stabilise.
“But if inflation remains elevated, the Bank of England has less room to support the economy even as momentum slows. That means higher borrowing costs could remain part of the backdrop for longer, putting added pressure on domestically focused companies.
“The FTSE 100 may continue to look relatively resilient because of its global earnings and exposure to energy, healthcare and financials, but the picture beneath the index is more difficult for businesses tied closely to the UK consumer and domestic economy.”
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