Fresh pressure on the Bank of England to delay raising interest rates has emerged after figures for manufacturing and consumer credit highlighted the weakness of the UK economy.
Until recently, next week’s Bank meeting was widely expected to sanction another rate increase, but weak growth figures on Friday made such a move less likely and data on Tuesday seems to rule it out almost entirely, sending the pound to a three-month low against the dollar.
The latest monthly snapshot of industry from the Chartered Institute of Procurement and Supply and the information company Markit (CIPS/Markit) showed that the slowing of the economy recorded in the first quarter of 2018 continued into the second quarter.
The closely watched purchasing managers’ CIPS/Markit fell from 54.9 in March to 53.9 in April. While any reading above 50 points to growing manufacturing output, the rate of expansion was the weakest in 17 months.
Meanwhile, the Bank of England’s monthly money and credit statistics detected a marked waning in consumer appetite for unsecured borrowing in March. Lending to consumers stood at just £300m in March, the smallest increase since November 2012 and well down on the monthly average for the latest six months of £1.5bn.
The dramatic decline in consumer borrowing follows a clampdown by the chief financial regulator, the Financial Conduct Authority, on bank lending to consumers, which grew by 10% or more on average between 2014 and 2017. In March, the annual growth rate in consumer credit dropped from 9.4% to 8.6%.
via The Guardian