The preliminary estimate of the UK S&P Global Composite Purchasing Managers’ Index fell to 52.9 from 53.8, below a median forecast of 53.5 in a Reuters poll of economists but still well above the 50 level that separates growth from contraction.

Data firm S&P Global said the figures were consistent with Britain’s economy expanding at a quarterly rate of 0.3%, about half the pace of earlier this year. However, that kind of expansion would be stronger than the typical pace of the past two years.

Soft Landing

Chris Williamson, chief business economist at S&P Global Market Intelligence, said the survey showed a welcome mix of growth and easing inflationary pressures.

“The data therefore hint at a ‘soft landing’ for the UK economy, whereby the fight against inflation is showing increasing signs of being won without higher interest rates having caused a downturn,” Williamson said.

Input costs faced by companies rose at a faster rate in September but companies increased the prices they charge by the least since February 2021, and they also turned cheerier about the outlook, helped by the relative stability in the economy.

Investments On Ice

The Bank of England said last week it would be cautious about cutting interest rates after a first reduction in August as it awaits clearer signs on inflation.

A Reuters poll of economists published earlier this month suggested the BoE will cut borrowing costs just once more this year, in November.

S&P Global said the biggest concern voiced by firms related to uncertainty about the Oct. 30 budget when new finance minister Rachel Reeves will publish her first tax and spending plans.

Williamson said investment projects were being put on ice pending clarity on the new government’s policies, especially towards taxation.

The PMI for the services sector, which dominates Britain’s economy, fell to 52.8 from 53.7 in August, again below the poll consensus of 53.5.

Growth weakened a bit more sharply among factories with the manufacturing PMI falling by a full point to 51.5.