LeadershipNot yet confirmed elsewhere1 publisher2 min readPublished
BDO's September index puts UK business cost pressure at a three-year high
BDO's UK inflation index rose to 103.65 in September, its highest reading since June 2023, on rising energy, fuel and raw material costs. The reading lands just ahead of the Autumn Budget, where BDO says firms want certainty.
The Board Room · Leadership desk
Key figures: BDO's UK inflation index was 103.65 in September, up from 102.18 in August, a rise of 1.47 points. Brent crude was $104.46 a barrel, just 0.25% lower at the time of the Guardian's update.
| Figure | Value | Note | Claim |
|---|---|---|---|
| BDO inflation index, September | 103.65 index | 1 | |
| BDO inflation index, August | 102.18 index | 2 | |
| Rise, August to September | 1.47 points | 11 | |
| Brent crude at Guardian update | 104.46 $ a barrel | 9 |
What happened
- According to BDO's report, UK manufacturing and services output dropped last month as demand at home weakened.
- Brent crude was 0.25% lower at $104.46 a barrel when the Guardian updated its coverage, after trading about 2% down earlier.
- Trump said Ukraine and Russia had agreed to stop striking each other's energy facilities, after Friday night's US diesel-supply deal with Moscow.
Why it matters
- cost Firms that cannot raise prices into softening demand absorb the whole cost increase in margin, and the reported fall in output makes price rises harder to hold.
- constraint Announced de-escalation has not lowered Brent enough to ease input costs, so the pressure BDO measured has no clear offset from the oil price yet.
- decision The Autumn Budget's treatment of employer costs now has to be weighed against firms that report low hiring intentions and say they want certainty over intervention.
The September reading is 1.47 points above August, a rise of about 1.4% [11][12]. It arrives with weaker activity. According to BDO, UK manufacturing and services output dropped last month as demand at home weakened [5]. Scott Knight, BDO's head of growth, said: "Cost pressures continue to squeeze margins, hiring intentions are low and growth is starting to plateau." [7] The Guardian's account of the report does not say whether firms are absorbing the extra costs or passing them on to customers.
Energy, fuel and raw materials are the named drivers of the rise [4]. The oil market gave little relief on the day the figures came out. Trump said Ukraine and Russia had agreed to stop striking each other's energy facilities, after the diesel-supply deal between the US and Moscow that was announced on Friday night [14]. Brent crude had been down around 2% a few hours earlier [10]. By the time the Guardian updated its coverage it was 0.25% lower at $104.46 a barrel [9], so roughly 1.75 percentage points of the early fall had gone [13].
Kyle Rodda, senior financial market analyst at Capital.com, said "the true impact is piecemeal, especially as Middle East refining remains heavily compromised and Ukrainian forces strategically strike Russian refineries." [15] On that reading, the diesel deal changed the optics more than the supply.
BDO warned that high costs and softer demand were piling fresh pressure on firms as the Autumn Budget approaches [6]. Knight set out what firms want from it: "Firms are not looking for grand interventions, but they do need certainty. Right now, concerns about further downside risks outweigh expectations of positive change." [8]
What to watch
- BDO's October reading: whether it clears 103.65 or falls back toward August's 102.18.
- Whether Brent holds near $104 once Ukraine and Russia act on, or break, the announced halt to energy-facility attacks.
- Whether Autumn Budget measures add to employer costs, given Knight's call for no surprises.
Clarity's read
What the record supports and how the coverage leans. The claims behind it follow.
Reality
- Evidence45
- Adoption
- Insufficient
- Hype gap+10
- Incentives35
- Confidence50
Claim ledger
Ranked by verification strength, evidence, and original report placement.
- [1]
BDO reported that its inflation index rose to 103.65 in September.
- [2]
BDO's inflation index was 102.18 in August.
- [3]
The September reading of 103.65 is the highest since June 2023.
- [4]
UK businesses face the sharpest inflation pressures in three years, due to rising energy, fuel and raw material costs.
- [5]
BDO's report found that output fell across UK manufacturing and services last month as domestic demand softened.
- [6]
BDO warns that elevated costs and weakening demand are putting renewed pressure on firms ahead of the Autumn Budget.
- [7]
Scott Knight, head of growth at BDO, said: "Cost pressures continue to squeeze margins, hiring intentions are low and growth is starting to plateau."
- [8]
Scott Knight, head of growth at BDO, said: "Firms are not looking for grand interventions, but they do need certainty. Right now, concerns about further downside risks outweigh expectations of positive change."
- [9]
Brent crude was just 0.25% lower at $104.46 a barrel at the time of the Guardian's update.
- [10]
Brent crude had been down around 2% a few hours before the Guardian's update.
- [11]
BDO's index rose by 1.47 points between August and September.
- [12]
The September rise is about 1.4% on the August reading.
- [13]
Roughly 1.75 percentage points of Brent's early fall had been reversed by the time of the update.
- [14]
Trump declared that Ukraine and Russia have agreed to halt attacks on each other's energy facilities, following the US diesel-supply deal with Moscow announced on Friday night.
ReportedContestedSource: Trump's declaration, as reported by the Guardian business live blogView cited source - [15]
Kyle Rodda, senior financial market analyst at Capital.com, said the US diesel deal helped slightly with optics, but "the true impact is piecemeal, especially as Middle East refining remains heavily compromised and Ukrainian forces strategically strike Russian refineries."
ReportedContestedSource: Kyle Rodda, senior financial market analyst at Capital.comView cited source
Sources
1 independent publisher whose own reporting we read for this story.
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