---
title: "UK economy shows signs of recovery as PMI rises and inflation steadies"
publisher: "Stockmark.IT"
author: "Stockmark.IT Website"
published: "2025-10-26T07:21:12+00:00"
modified: "2025-10-26T07:34:13+00:00"
date: 2025-10-26
canonical: "https://stockmark.it/uk-economy-shows-signs-of-recovery-as-pmi-rises-and-inflation-steadies/"
category: "Inflation"
categories: ["Inflation", "Interest rates", "Manufacturing", "UK Economy"]
image: "https://i0.wp.com/stockmark.it/wp-content/uploads/stencil.default-2024-01-09T064641.337.jpg?fit=1200%2C800&quality=89&ssl=1"
format: "news"
language: "en-GB"
---

# UK economy shows signs of recovery as PMI rises and inflation steadies

**Published:** October 26, 2025
**Author:** Stockmark.IT Website
**Categories:** Inflation, Interest rates, Manufacturing, UK Economy
**Featured image:** ![Three people stand in a modern industrial workshop, examining a laptop and discussing ideas among machinery and equipment, surrounded by car parts and metal frameworks—a scene reflecting UK manufacturers in an era of growth. @ stockmark.it](https://i0.wp.com/stockmark.it/wp-content/uploads/stencil.default-2024-01-09T064641.337.jpg?fit=1200%2C800&quality=89&ssl=1)

---

The UK economy may be poised for a positive shift as fresh economic data indicate a resurgence in both growth and confidence. Experts suggest that the climate is improving after the S&P Global UK composite flash purchasing managers’ index (PMI) climbed to 51.1 in October from 50.1 in September, marking a move above the crucial 50 threshold that separates economic contraction from expansion.

The recent uptick in activity is attributed in no small part to the restart of production at Jaguar Land Rover facilities, following a cyberattack that reportedly inflicted nearly £2 billion in losses on GDP. Manufacturing PMI improved markedly, rising from 46.2 to 49.6, the highest reading in a year and coming close to expansion. Meanwhile, the services PMI, examining a sector responsible for around 80 per cent of UK economic output, increased from 50.8 to 51.1 over the same period.

Chris Williamson, chief business economist at S&P Global Market Intelligence, noted that September appears to have been the economic low point, as business conditions are now beginning to brighten. He points to renewed growth in manufacturing and an uptick in service demand, driven largely by consumer spending. Business confidence is on the rise, redundancies are tapering off and inflationary pressures are aligning more closely with the Bank of England’s 2 per cent inflation target.

PMI metrics reveal that inflation for final products has dipped to a four-month low, and input cost inflation has reached its most subdued level since last November. Supplementing these trends, the Office for National Statistics (ONS) recently reported inflation holding at 3.8 per cent for a third consecutive month, defying earlier forecasts that predicted a jump to 4 per cent. The Bank of England is thereby under increased speculation to cut interest rates, possibly as early as December, according to economist forecasts. Private sector job losses have been at their lightest since May, lessening concerns about widespread redundancies caused by previous surges in employer national insurance contributions.

Borrowing costs across the UK have tumbled recently, reaching levels not seen since the start of the year. This reassures financial markets following signals from Chancellor Rachel Reeves that the autumn budget will avoid fuelling inflation through increased taxation and restrained government spending. The expectation is a comprehensive set of tax measures aimed at stabilising public finances rather than stimulating demand.

Pantheon Macroeconomics analysts maintain that the latest growth data and advance survey signals point to a resilience in the face of high interest rates, persistent inflation and pre-budget uncertainty. On Friday, the yield on the benchmark ten-year UK government bond edged up to 4.44 per cent, while sterling and the FTSE 100 both experienced minor movements after reaching milestone highs earlier in the week. All eyes will be on the coming budget announcement and how policymakers respond to these encouraging but complex indicators.

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