LONDON, Oct. 4 (Xinhua) -- Recent surveys indicated that Britain's subdued economic growth is affecting both business performance and consumer confidence.
Britain's economy is grappling with multiple challenges: GDP growth slowed sharply in the second quarter, inflation remains among the highest in the G7, and rising household disposable income is leading to higher savings rather than stronger consumption.
The country's seasonally Composite PMI dropped to its lowest level in five months at 50.1 in September, with manufacturing production falling to the greatest extent in six months and service sector growth easing to a five-month low, data from S&P Global showed Friday.
Its manufacturing PMI stood at 46.2 in September, remaining in contraction territory for 12 consecutive months. Specifically, production fell for 11 straight months, with the rate of contraction the fastest since March, while new order intakes decreased for the 12th month in a row and to one of the greatest extents during the past two years, according to S&P Global.
Rob Dobson, director for Economic Indices at S&P Global Market Intelligence, noted that the manufacturing readings provide "further worrying news for the health of UK industry," as manufacturers are facing an increasingly challenging environment, with intakes of new business and levels of production hit by weak market sentiment, a dearth of new export work and a high-cost environment exacerbated by tax and labor cost rises.
"The current tough operating environment is also seeping through to business confidence and leading to an increased focus on cost cutting," Dobson said, noting that business confidence in the sector for the next 12 months remains subdued, job losses have been recorded in each of the past 11 months, and a further cut in purchasing activity is symptomatic of a focus on trimming non-essential spending.
In September, Britain's services PMI came in at 50.8, indicating the weakest growth since May, although still above the neutral 50.0 threshold, according to survey data released recently from S&P Global.
Many survey respondents reported that subdued economic conditions and elevated market uncertainty had acted as a brake on business activity growth, according to the company.
"UK service providers experienced a disappointing end to the third quarter as weak consumer confidence, delays to business spending decisions and falling exports all weighed on demand," said Tim Moore, economics director at S&P Global Market Intelligence.
Corporate clients had deferred spending decisions until after the Autumn Budget, which will be delivered in late November, while households were also hesitant about major purchases, Moore added, quoting survey respondents.
More survey results showed that British businesses and consumers have expressed pessimism alike amid sluggish economic conditions.
A recent survey from the Institute of Directors revealed that the economic confidence index, which measures business leaders' optimism in Britain's economy, fell to -74 in September, marking the lowest reading of the index since its introduction in July 2016.
KPMG's survey data, released on Friday, also indicated that consumer confidence in the economy fell during the June-August period to its lowest level so far this year.
Among the 3,000 consumers surveyed, 62 percent said they believe the British economy is worsening, up sharply from 43 percent at the beginning of 2025. About 56 percent reported cutting spending on everyday items, 38 percent said they are deferring big-ticket purchases, and another 38 percent are saving more as a precaution, the data showed.
"Cost continues to influence buying behavior and price is the main purchasing driver for 68 percent of people when buying everyday items," said Linda Ellett, head of consumer, retail and leisure for KPMG UK.
"Inflation is now one of the biggest concerns among the public, with food inflation expected to rise to 6 percent by the end of the year," said Helen Dickinson, chief executive of the British Retail Consortium. "Worries about the budget, combined with the increase in the cost of living, have eroded confidence, with little sign that inflation will come down soon." ■
