UK factories report stronger activity in Oct

LONDON: British manufacturers reported robust growth last month and rising inflation pressure, an industry survey showed. The IHS Markit/CIPS manufacturing purchasing managers’ index (PMI) rose to 56.3 in October from an upwardly revised 56.0 in September. That exceeded its long-run average and bucked economists’ forecasts in a Reuters poll for a slight decline.
“UK manufacturing made an impressive start to the final quarter of 2017 as increased inflows of new work encouraged firms to ramp up production once again,” said Rob Dobson, a senior economist at IHS Markit, which compiled the data. “The domestic market remained strong, whereas new export orders increased at a slightly slower pace, the latter showing signs of being hit by the recent strengthening of sterling,” he said.
The pound gained further after Wednesday’s data, climbing to a four-and-a-half month high against the euro and its highest in two weeks against the US dollar. Sterling is still down more than 10 per cent from its level before Britain voted to leave the European Union in June 2016.
“Although demand from both home and overseas markets remains robust, manufacturers will have half an eye on what the Monetary Policy Committee decides to do,” he said. British manufacturers enjoyed their strongest growth this year in the three months to the end of September, data showed last week, and Dobson said the sector appeared to be continuing to expand at a quarterly rate of around 1 per cent. — Reuters