UK and Japan Business Activity Slows in September

Business activity slowed in both the United Kingdom and Japan during September, according to preliminary Purchasing Managers' Index data from S&P Global. In the UK, the composite PMI fell to 51.7, weighed down by a three-month low in services activity and rising inflation linked to energy costs from the war in Iran.

While the UK manufacturing sector grew, economists warn that sluggish expansion and high borrowing costs may lead the Bank of England to raise interest rates on November 5. Finance Minister John Healey is preparing his first budget against this backdrop of cooling activity.

Japan's composite PMI dropped to a four-month low of 52.5 as soft domestic demand hindered growth. Despite the slowdown in new work, Japanese firms increased hiring at the fastest pace since February and maintained high selling prices, aided by a weak yen. Japanese manufacturers continue to benefit from strong export demand for semiconductors and AI technology.