UK Manufacturing Growth Slows Down in November

Growth in Britain’s manufacturing sector has weakened and costs are falling sharply, suggesting inflationary pressure remains subdued, and Bank of England policymakers are unlikely to be in a rush to raise interest rates.

The purchasing managers’ index (PMI) for manufacturing, based on a survey of the sector, declined to 52.7 in November, from a revised 55.2 in October.

That remained above the 50-level that signals expansion; but suggested momentum in the sector is weakening.

Analysts at data provider Markit, which carries out the survey, also pointed out that prices are falling at one of the fastest rates in the survey’s 24-year history, as declining global commodity costs feed through the supply chain.

Rob Dobson, of Markit, said: “If this mix of subdued growth and weak price pressures is reflected in other sections of the economy, the Bank of England will have further cause to push any potential rate increase into the spring of 2016.”

Bank of England governor Mark Carney has suggested that the decision about rate rises is likely to “come into sharper relief around the turn of this year;” but continued deflation across industry is likely to undermine the arguments for an increase in borrowing costs at next week’s monetary policy committee meeting, the last of 2015.

via The Guardian

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza