DAVY VIEW

Last week’s flash UK composite PMI at 46.8 in September shows the clear risk of recession in H2 2023, on past form consistent with a 0.4% quarterly fall in GDP. Worryingly, the PMI signalled that both output and employment fell at their fastest pace in September since 2009 (excluding the pandemic). We also know the Bank of England had seen a preview of the PMI before its 5-4 split vote to keep rates on hold at 5.25%, likely tipping the balance.