Cost pressures on UK businesses have climbed to their steepest point in three years, driven by higher outlays on energy, fuel, and raw materials. BDO's inflation tracker climbed to 103.65 for September, advancing from the 102.18 recorded a month earlier and reaching a level not seen since June 2023.
BDO's latest assessment points to a combination of higher input costs and softening consumer appetite placing fresh strain on businesses as the Autumn Budget approaches. Production across both UK manufacturing and services contracted in the previous month, with the findings pointing to a softening in demand from domestic buyers.
BDO's head of growth, Scott Knight, conveyed that companies are approaching this Budget with a single, consistent expectation: an absence of unwelcome surprises. Profit margins face ongoing pressure from rising costs, appetite for new hires remains muted, and expansion appears to be levelling off. What businesses want is not sweeping policy action, but rather a stable and predictable operating environment.
Brent crude gave back around 2% during the session, with the move downward tied to a ceasefire on energy-infrastructure strikes between Ukraine and Russia — itself coming in the wake of a US fuel-supply arrangement with Moscow that had been announced the prior weekend — as market participants placed greater weight on bearish factors than on any potential upside. Priced at $104.46 per barrel, Brent crude edged lower by around a quarter of a percent.
According to Kyle Rodda, a senior financial market analyst at Capital.com, a disputed US arrangement with Russia — one permitting expanded diesel exports — offered some modest relief to sentiment around supply conditions for the fuel that underpins much of industrial activity.
The Institute for Fiscal Studies has put the gap in UK Chancellor John Healey's departmental finances at as much as £35bn, attributing the shortfall to inflation eating into the real-terms worth of cash budgets while simultaneously pushing up the cost of government borrowing. The Institute for Fiscal Studies put the chancellor on notice that her upcoming budget could amount to little more than an exercise in financial wishful thinking without concrete plans to address mounting expenditure pressures, among them the push for greater defence investment.
Healey is set to attend the Annual Meetings of the International Monetary Fund and the World Bank in Bangkok, where multilateral coordination will feature among his stated priorities. Healey argued that armed conflicts in the Middle East and Europe were driving up costs for people at home — from fuel prices to mortgage rates — and that Britain and its partners were positioned to address those pressures collectively.
The minister pledged to engage with global trading partners as a way of sustaining commerce, easing pressure on households and businesses, and building a more durable foundation for the national economy that would spread prosperity across every region. The spending plan is intended to extend that approach, with controlled public finances underpinning broader economic stability.
The Fight Inequality Alliance has urged finance ministers gathering at the IMF/World Bank summit in Bangkok to put debt relief measures for lower-income nations on the table. FIA General Secretary Jenny Ricks argued that bodies such as the IMF and World Bank, products of an earlier era, continue to shape global economic frameworks in ways that affect countries beyond their membership.
Debt-repayment obligations under such programmes divert public resources away from health services and education, with each payment to external creditors drawing down the funds available for schools, clinics, and household necessities.
Demands voiced at a demonstration — calling for debt relief, higher taxation of the wealthy, and an end to policies that shift financial costs onto workers — preceded the Royal Swedish Academy of Sciences in Stockholm unveiling the winner of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. Polymarket odds place MIT economics professor David Autor at the front of the field, with a 30% probability attached to his name.
A 19% stake is attributed to Ariél Pakes, who occupies the Thomas professorship in economics at Harvard University. A 12% stake is attributed to Susan Athey, who holds a professorship in the economics of technology at Stanford Graduate School of Business. Woodford, whose scholarly work spans macroeconomics and monetary theory, accounts for a 10% share.
