Britain’s factory activity grew a lot more strongly than expected in August as work flowed in from home and abroad, a survey showed on Friday, suggesting the economy might be picking up speed after a slow first half of 2017, reports Reuters.
The Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) jumped to a four-month high of 56.9 from 55.3 in July, above all forecasts in a Reuters poll of economists.
Manufacturing accounts for only around 10 per cent of the British economy but the government is hoping it will grow on the back of the fall in the value of sterling since last year’s Brexit vote, which makes British exports cheaper.
Rob Dobson, a director at IHS Markit, said the strong performance last month, after a good July, should help support overall growth in the third quarter.
That could “add fuel to hawkish (Bank of England) policymakers’ calls for higher interest rates,” he said.
The BoE’s rate-setters voted 6-2 against a rate hike in August with most policymakers expressing concern about the impact of last year’s Brexit vote on the economy which slowed sharply in the first six months of this year.
Sterling rose after the PMI survey was published.
However, the strength of Britain’s factories in August was less marked than elsewhere in Europe. Manufacturing in the euro zone had its best month in August since 2011.