(Bloomberg) -- Growth in Britain's private sector cooled to its weakest in almost a year after businesses were spooked by warnings over next week's budget and concerns about the US election.

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S&P Global said its purchasing mangers' index dropped to 51.7 in October from 52.6 the previous month. While the reading is below the 52.5 expected by economists, it's still above the 50 threshold separating growth and contraction.

Gloomy warnings from the new Labour government over its fiscal inheritance from the previous Conservative administration have dampened business confidence and spending, according to S&P. Businesses are taking a "wait-and-see approach to major spending decisions," pushing the PMI to its lowest in 11 months, it said in a statement.

The survey is just the latest to suggest that Prime Minister Keir Starmer and his chancellor, Rachel Reeves, have over-egged their warnings ahead of what is expected to be a belt-tightening budget on Oct. 30. Several indicators have shown business and consumer confidence plunging in recent months amid fears that Reeves will raise taxes significantly to boost funding for public services and fill the £22 billion ($29 billion) fiscal hole she says Tories left her.

"Companies await clarity on government policy, with conflicts in the Middle East and Ukraine, as well as the US elections, adding to the nervousness about the economic outlook," said Chris Williamson, chief business economist at S&P Global Market Intelligence. "The policies announced in the budget have the potential to play a major role in steering the direction of the economy in the months ahead."

Williamson said that October's PMI data is consistent with the economy weakening to a quarterly growth rate of just 0.1%. Both the services and manufacturing sectors saw growth ease.

That would mark a sharp slowdown from the strong performance in the first half of the year, when the UK was the fastest growing economy in the Group of Seven. It will be particularly concerning for Starmer who has promised to boost growth to an ambitious 2.5% and is relying on an acceleration to fund improvements in public services.

However, the downturn seen in confidence indicators is yet to show up in official activity data, and the PMI has previously overstated the impact of political jitters over issues such as Brexit and Liz Truss' 7-week premiership.