Britain’s manufacturing recovery powered ahead in the second quarter of the year, with growth well ahead of expectations in April, pushing the pound to a near five-year high against the dollar. A strong rise in output, new orders and employment all painted an increasingly rosy picture of the sector, which accounts for about 10% of the UK economy. Firms are adding jobs at the rate of 10,000 a month.
The Markit/CIPS manufacturing purchasing managers index jumped sharply to a five-month high of 57.3 in April, from 55.8 in March, where any reading above 50 signals expansion. Economists had expected 55.4.
Rob Dobson, senior economist at Markit, said: “UK manufacturing continued its surging start to 2014, with output growth accelerating in April to a level among the highest signalled over the past two decades. Supporting these efforts are a strong domestic market and improving global economic conditions.”
Dobson said a backdrop of subdued inflation was likely to encourage Bank of England policymakers to maintain their “wait and see” approach to the recovery.
Mark Carney, the Bank’s governor, and fellow members of the interest rate-setting Monetary Policy Committee, have made it clear in recent months that they are in no rush to increase borrowing costs. The first rate rise is likely in spring 2015. Interest rates have been on hold at 0.5% since March 2009.
via The Guardian