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UK manufacturing activity expanded at a slightly faster pace in September, while input costs and selling prices accelerated for the first time in four months, according to the latest S&P Global survey.

The UK Manufacturing Purchasing Managers’ Index rose to 51.9 in September from 51.7 in August, remaining above the 50 level that separates expansion from contraction for an 11th consecutive month.

Factory output continued to increase but recorded its slowest growth in six months as higher energy costs affected demand.

Input Costs and Selling Prices Accelerate

Input cost inflation increased for the first time since May, with manufacturers reporting higher prices for chemicals, electronics, energy and food.

Transport expenses also increased, partly reflecting higher diesel prices. Manufacturers passed some of the additional costs on to customers, with selling prices rising at a faster rate during September and extending their sequence of monthly increases to 10 months.

Price pressures were stronger among small and medium-sized manufacturers than among larger companies.

“The big shift in September” was the renewed acceleration in input costs and factory-gate prices, said Rob Dobson, director at S&P Global Market Intelligence.

The figures provide further information for the Bank of England as it assesses the extent to which higher energy and transport costs are feeding into broader inflation.

New Orders Rise for Tenth Consecutive Month

Supply chains remained under pressure, with supplier delivery times lengthening during September. Manufacturers cited port congestion, shipping delays, geopolitical tensions and shortages of raw materials.

Demand indicators were more positive. New orders increased for a tenth consecutive month and grew at a faster pace than in August.

New business increased in both domestic and export markets, with manufacturers reporting higher demand from markets including the United States, Asia-Pacific, Brazil and Australia.

Employment increased for a sixth consecutive month, with the pace of hiring close to the two-year high recorded in August as companies responded to higher orders and growing backlogs.

Performance Varies Across Manufacturing Sector

Conditions differed across manufacturing categories and company sizes. Investment goods production recorded its fastest growth since late 2017, while output of consumer and intermediate goods declined.

Small manufacturers reported declines in production and new orders, while medium-sized and large companies continued to expand.

Around 49% of manufacturers expect output to increase over the next 12 months. Companies cited expansion plans and new product launches while also identifying geopolitical risks, economic uncertainty and domestic policy issues as factors affecting the outlook.

The survey was based on responses from around 650 manufacturers collected between September 10 and 25. Dobson also said the upcoming UK government Budget could have a material effect on the sector’s outlook.

Gold prices edged lower on Thursday as markets weighed a decline in expectations for another Federal Reserve interest-rate increase against elevated US Treasury yields and a firmer dollar.

At 04:46 ET (08:46 GMT), spot gold declined 0.1% to $4,152.98 per ounce, while gold futures were also down 0.1% at $4,182.67 per ounce.

The US Dollar Index gained 0.3% to 101.79. Strength in the dollar can make dollar-denominated gold more expensive for buyers using other currencies.

Gold Falls 6% During September

Gold recorded a 6% decline in September, its largest monthly fall since June. The move followed the Federal Reserve’s first interest-rate increase since 2023 and indications that additional monetary tightening could remain under consideration.

Bond yields also moved higher globally during the month as markets assessed government debt and fiscal deficits. Rising yields can increase the opportunity cost associated with holding gold because the metal does not provide interest income.

“Following liquidation brought on by the Iran conflict, higher oil, inflation and yields, which pumped up the USD, gold rallied on renewed investor interest in late summer. However, the September [Federal Open Market Committee] rate hike, expectations of further rate hikes and rising oil prices pushed gold back on the defensive,” HSBC analysts said in a note.

Softer Inflation Data Reduces Expectations for October Rate Increase

Expectations for another Federal Reserve rate increase in October declined following the latest US inflation figures.

The personal consumption expenditures price index excluding food and energy increased by 0.2% in August, below market expectations. The previous month’s reading was also revised lower.

The implied probability of an October rate increase subsequently fell to approximately 34%, compared with almost 70% earlier in the week.

US consumer spending also increased at its fastest pace in more than a year during August. Longer-term Treasury yields remained close to multi-decade highs.

Market attention is now turning to Friday’s US employment report, which could provide further information on the Federal Reserve’s interest-rate outlook.

Oil prices advanced on Thursday as markets assessed improving crude flows from the Middle East alongside continued uncertainty surrounding diplomatic efforts to end the regional conflict.

December Brent crude futures gained 2.0% to $100.03 per barrel by 04:26 ET (08:26 GMT), while US West Texas Intermediate futures increased 2.2% to $92.37 per barrel.

The previous front-month Brent contract expired on Wednesday after settling at $103.50. Brent recorded an approximately 14% gain in September, its largest monthly increase since July, while WTI rose around 5%.

Gulf Oil Flows Show Signs of Recovery

Middle East crude exports increased during September, according to data from Kpler, reaching 16.328 million barrels per day. That represented the highest level since the regional conflict began in February.

Saudi Arabia has meanwhile resumed tanker loadings at the Red Sea port of Yanbu following the restart of operations through the country’s east-west pipeline.

Despite the improvement, regional exports remained below their February levels. Kpler data showed that Middle East crude exports in September were still around 3.2 million barrels per day lower than in February.

The remaining difference means changes in regional crude flows continue to have the potential to affect global supply conditions.

Markets Monitor US-Iran Diplomatic Efforts

Diplomatic efforts between Washington and Tehran remained another area of focus for oil markets.

Iran said on Wednesday that it had received a US response to its latest proposal aimed at restoring a ceasefire.

The development followed President Donald Trump’s rejection of an earlier proposal involving the reopening of the Strait of Hormuz in exchange for the removal of the US blockade on Iranian ports.

No agreement between the two sides was reported.

US Oil Inventories Rise by 922,000 Barrels

US crude inventories increased by 922,000 barrels last week, according to figures released by the Energy Information Administration on Wednesday. Analysts had forecast a decline of 700,000 barrels.

Fuel inventories declined during the same period. Gasoline stocks fell by 1.7 million barrels, while inventories of distillates, including diesel and heating oil, decreased by 2.3 million barrels.

Trump said discussions were continuing over a possible restriction on US diesel exports. His comments followed an earlier White House denial of a report that the administration was considering a 90-day blanket ban.

US diesel prices reached a record $6.53 per gallon last week, while domestic diesel inventories remained at historically low levels.

European and UK wholesale natural gas prices moved higher on Thursday as October and the fourth quarter began, with storage levels and developments in the Middle East remaining in focus.

The benchmark Dutch front-month natural gas contract rose 1.0% to €73.10 per megawatt-hour, remaining close to recent multi-week highs.

In the UK, the equivalent day-ahead wholesale gas contract increased 0.7% to 184.00 pence per therm.

European Winter Heating Season Begins

The increase in gas prices coincided with the start of the European winter heating season, when seasonal demand for heating typically begins drawing on stored gas supplies.

According to Gas Infrastructure Europe data, underground storage facilities across the European Union are around 12 percentage points below their levels at the same point last year.

European buyers also continue to compete with Asian markets for seaborne liquefied natural gas cargoes, with Asian spot prices affecting competition for winter LNG supplies.

Middle East Developments Remain in Focus

Energy markets continued to monitor developments in the Middle East, including stalled negotiations between the United States and Iran and uncertainty surrounding the Strait of Hormuz.

Brent crude prices remained elevated, coinciding with higher prices across parts of the broader energy market.

The combination of lower year-on-year European gas inventories, competition for LNG cargoes and uncertainty affecting global shipping routes leaves regional supply conditions sensitive to changes in winter demand.

Eurozone manufacturing activity expanded at its fastest pace in more than four years during September, according to the latest S&P Global purchasing managers’ survey.

The S&P Global Eurozone Manufacturing PMI increased to 52.9 in September from 52.7 in August, reaching its highest level since May 2022. Readings above 50.0 indicate an expansion in activity.

The manufacturing output index also increased, rising to 53.6 from 53.3 and reaching a 55-month high.

The survey data were collected between September 10 and September 23, 2026.

All Eight Surveyed Countries Record Expansion

All eight eurozone countries covered by the survey recorded an improvement in manufacturing conditions for the first time in more than four years.

The Netherlands registered the strongest improvement, followed by Ireland and Austria. Germany and Greece also recorded expansions, while growth was more modest in Spain, France and Italy.

New orders increased at their fastest rate since March 2022. Export orders rose for a second consecutive month, representing the first sustained increase in more than four and a half years.

Manufacturing Employment Increases

Employment across the eurozone manufacturing sector increased in September following a three-year period of decline that continued through July.

Backlogs of work also increased for the first time since April, with outstanding business accumulating at its fastest rate in almost four and a half years.

Manufacturers increased their purchasing activity at the second-fastest pace since May 2022. Inventories of inputs declined only marginally by the end of the third quarter.

Supplier delivery times continued to lengthen, although the extent of the delays was the least pronounced since February.

Price Pressures Increase as Business Confidence Improves

Input costs and manufacturers’ selling prices both increased at faster rates in September, recording their first acceleration since May.

However, the rates of increase remained below the peaks recorded earlier in 2026 following the start of the Middle East conflict.

Business confidence among eurozone manufacturers improved to a seven-month high and moved further above its long-term average.