UK factories report growing inflation pressures, PMI shows

British manufacturers experienced a rise in cost pressures for the first time in four months during September, despite output growth slowing to its lowest pace since March, according to S&P Global Purchasing Managers' Index data released on Thursday. Factories reported their highest increase in input costs since June, while the prices they charged also began to climb more rapidly, the report indicated.

The survey's price measures shifted from suggesting a decline in inflationary pressures to signaling a return of upward pressure, according to Rob Dobson, director at S&P Global Market Intelligence. The survey's headline reading rose slightly to 51.9 in September from 51.7 in August, but the output gauge declined to 51.5 from 52.1, marking its second consecutive monthly slowdown.

Investors anticipate the Bank of England will increase interest rates in November, following warnings from Governor Andrew Bailey and other senior officials that the energy crisis sparked by the Iran war could fuel broader inflation. Business confidence fell below August's six-month high, reflecting worries about geopolitical, economic, and domestic policy developments.

Employment expanded for the sixth consecutive month due to improved new orders and a drive to clear backlogs of work, but hiring slowed compared to August's two-year high. The PMI data was compiled from responses received between September 10 and September 25.