9, signalling contraction. 2, but the overall PMI remained below the 50‑point growth threshold. Inflationary pressure intensified as input‑cost indices rose, while firms reported weaker hiring and dwindling confidence. Higher borrowing costs have added to the strain, putting the upcoming October budget and the Bank of England’s policy stance under pressure.
The dip in the services sector and firmer inflation have pulled the pound lower against the dollar, widening the INR‑GBP spread. A softer pound can boost Indian exporters that source inputs from the UK and ease commodity price volatility, but it also raises the cost of overseas travel and education for Indian families. Global risk aversion may rise, prompting foreign investors to trim exposure to UK equities and rotate into safer assets, a move that could temper gains in the Sensex and Nifty. Retail investors should watch the RBI’s response to any spill‑over in currency markets and stay alert to shifts in global bond yields that often follow UK monetary policy cues.
Diversifying into sectors less sensitive to foreign exchange, such as domestic consumption or IT, can help cushion potential volatility. Keeping an eye on the UK budget outcomes and the Bank of England’s next rate decision will be key to navigating the near‑term market landscape.