UK Composite PMI Rises to 53.1 as Eurozone Slips to 51.9
Key Facts
Britain’s preliminary composite Purchasing Managers’ Index rose to 53.1 in October, from 52.0 in September, exceeding market expectations of 51.8, according to FXStreet’s coverage of data released on 23 October. The index reached its highest level since February, signaling an improvement in the pace of private-sector activity. In the Eurozone, the composite index fell to 51.9 during the month, according to FXStreet’s coverage, but remained above the 50 threshold separating expansion from contraction. The divergence points to a widening gap between activity readings in the two economies in October. The readings come ahead of the European Central Bank’s monetary policy meeting scheduled for 28 and 29 October.
The improvement in Britain came across the services and manufacturing sectors, according to the PMI data reported by InvestingLive. The services index rose to 53.1 in October from 52.1 in September, exceeding expectations of 51.8. The manufacturing index also reached 52.8, compared with a previous reading of 51.9 and expectations of 51.7. Both indexes remaining above 50 means each pointed to an expansion in activity compared with the previous month. The readings show that the improvement was not confined to one sector, as both indexes rose from their previous levels and exceeded expectations.
S&P Global’s commentary said new orders in Britain expanded at their fastest pace in 25 months, while employment returned to growth for the first time since September 2024. Chris Williamson of the company said October’s flash readings showed the “strongest pace of growth since February.” He added that companies had begun hiring additional workers for the first time since employment was hit by the autumn 2024 budget. The return of employment to growth reflects a shift in a trend that had continued since that budget, according to the comment. This coincided with an acceleration in the services and manufacturing indexes, alongside an improvement in new orders.
In the Eurozone, the composite index fell to 51.9 in October while remaining in expansion territory, according to FXStreet. The index level indicates that activity improved compared with the previous month, although the pace of improvement was weaker than in the prior period. The services reading of 51.7 alone is not enough to attribute the composite decline solely to services. The services reading shows expansion continued, but it formed part of the broader picture of regional activity measured by the composite index. October’s picture therefore differed from Britain’s, where the composite index rose to its highest level since February.
The divergence was reflected in foreign-exchange moves after the PMI readings were released: the euro/sterling pair fell to a 17-month low near 0.8360, according to an FXStreet report published on 23 October. The pair’s daily close was 0.83848 on 21 October, then 0.83677 on 22 October, and 0.8374 on 23 October, according to EL7 data. These closes place the pair’s move in the context of the days surrounding the data release, while the FXStreet report cited the level near 0.8360 as a new 17-month low. The pair’s decline means the euro weakened against sterling in the trading covered by the report. The reported facts did not include another explanation for the pair’s move.
The European Central Bank Governing Council’s monetary policy meeting begins on 28 October, with the second day and press conference scheduled for 29 October, according to the bank’s official calendar. In Britain, the Treasury confirmed that the budget will be presented on Wednesday 28 October. The monthly GDP estimate for September and the preliminary estimate for the third quarter are also scheduled for release on 12 November, according to the Office for National Statistics. These dates place the flash activity data within a series of upcoming official events in Britain and the Eurozone. The ECB meeting comes days after October’s reading showed regional activity continued to expand at a slower pace.