Output fell across UK manufacturing and services last month

The accountancy and advisory firm BDO reported on Monday that its UK business inflation index climbed to 103.65 in September, up from 102.18 in August, marking the steepest cost pressures facing UK businesses in three years. The reading is the highest since June 2023, BDO said, and reflects rising energy, fuel and raw material costs.

BDO said elevated costs and weakening demand are putting renewed pressure on firms ahead of the Autumn Budget. “Businesses head into this Budget with one clear message: no surprises,” said Scott Knight, BDO’s head of growth. Knight argued that companies want predictability rather than fresh intervention. “Cost pressures continue to squeeze margins, hiring intentions are low and growth is starting to plateau,” he said. “Firms are not looking for grand interventions, but they do need certainty. Right now, concerns about further downside risks outweigh expectations of positive change.”

BDO’s report also found that output fell across UK manufacturing and services in September as domestic demand softened.

In global oil markets, prices eased slightly after US President Donald Trump said Ukraine and Russia had agreed to halt attacks on each other’s energy facilities. Brent crude traded 0.25% lower at $104.46 a barrel on Monday, after earlier declines of around 2% in Asian trading hours.

The price movement followed a US diesel-supply deal with Moscow announced Friday night. Kyle Rodda, a senior financial market analyst at Capital.com, said the agreement’s near-term impact was limited. “A highly contentious US deal with Russia to allow the export of more diesel to ease pressure in the market for the critical industrial fuel helped slightly with optics,” Rodda said. “But the true impact is piecemeal, especially as Middle East refining remains heavily compromised and Ukrainian forces strategically strike Russian refineries.”

The Guardian’s live blog noted that Russia’s trade balance for August was scheduled for release later in the day. It also said the Paris Motor Show was running throughout Monday and that the Nobel Memorial Prize in Economic Sciences was due to be announced at 10:45 a.m. BST.