Share

UK manufacturing unexpectedly accelerates to four-month high

London - UK manufacturing expanded at the strongest pace in four months in August, lifted by both export orders and domestic demand.

A measure of factory output rose to 56.9 from a revised 55.3 in July, according to IHS Markit’s Purchasing Managers’ Index. That exceeds the 55 forecast by economists in a Bloomberg survey and is well above the 50 level dividing expansion from contraction.

Companies reported the strongest intake of new orders since May, bolstered by the weaker pound. The currency’s depreciation also contributed to purchase-price gains accelerating for the first time in seven months, though at a slower pace than seen at the start of the year.

Last year’s referendum to leave the European Union sparked a plunge in the UK currency, making exports more competitive as well as driving up the cost of imported goods. While overall economic growth slowed in the first half as consumer spending stalled, some Bank of England policy makers are calling for an interest-rate increase to keep a lid on above-target inflation.

“The manufacturing economy remains in good health despite Brexit uncertainty,” said Rob Dobson, director at IHS Markit. That “should help support ongoing growth in the economy in the third quarter, which will add fuel to hawkish policy makers’ calls for higher interest rates.”

The BoE’s Monetary Policy Committee voted 6-2 to keep the benchmark rate at a record low last month. Michael Saunders, who supported an increase, said on Thursday that the risks from Brexit aren’t reason enough to hold off on a hike.

All five of the manufacturing PMI subcomponents rose in August. The rate of job creation was the highest in three years. Manufacturing accounts for about a 10th of the UK economy. PMI data on services, which make up almost 80%, will be published on Sept. 5.

SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.

Read Fin24's top stories trending on Twitter:

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
19.09
-1.0%
Rand - Pound
24.05
-0.7%
Rand - Euro
20.58
-0.5%
Rand - Aus dollar
12.39
-0.3%
Rand - Yen
0.13
-0.9%
Platinum
894.64
-0.3%
Palladium
992.99
-0.9%
Gold
2,197.50
+0.1%
Silver
24.44
-0.8%
Brent Crude
86.09
-0.2%
Top 40
67,880
+0.3%
All Share
74,091
+0.3%
Resource 10
56,315
+1.2%
Industrial 25
103,611
+0.3%
Financial 15
16,459
-0.4%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders