LONDON: British factories enjoyed their best month in more than four years in November, suggesting manufacturing will give a boost to the country’s otherwise sluggish economy going into 2018, a survey showed on Friday.
The IHS Markit/CIPS UK Manufacturing Purchasing Managers ‘Index (PMI) jumped to 58.2 from an upwardly revised 56.6 in October, hitting its highest level since August 2013 and topping all forecasts in a Reuters poll of economists.
Sterling rose briefly against the dollar after the PMI showed surging orders at home.
Overall, the survey added to signs that manufacturing could be a bright spot next year, when the slowdown in the overall economy is likely to deepen as Britain approaches its departure from the EU in March 2019.
Still, the British PMI was not as strong as the euro zone’s and export orders grew faster in other major European economies- suggesting the pound’s fall since last year’s Brexit vote has yet to give British factories a big advantage.
Higher inflation has pushed up costs for households and businesses this year,contributing to UK’s lagging economic performance compared with European peers. A broadening of price pressures represented a downside in the latest PMI, with factories facing extra costs from supply chain bottlenecks, overtaking sterling’s weakness as the main driver of price increases. — Reuters
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