"With 99 percent of survey responses received before the end of 23rd June, the latest PMI signalled that the manufacturing sector has started to move out of its early year sluggishness in the lead up to the UK's EU referendum".
-Rob Dobson, Markit
The UK PMI manufacturing index expanded at the fastest pace in five months in June before results of the Brexit referendum which showed that biggest part of Britons voted to leave the European Union. According to the Markit research group report, the British manufacturing index advanced to a seasonally adjusted 52.1 mark during the last month from a reading of 50.1 in May. Moreover, analysts had expected and advance to 50.4. Nevertheless, the impact of the following announcement will be limited since the main attention brought on the post-referendum impact on the manufacturing sector. Although, there could be expectations of a strong downward tendency in domestic confidence, potentially offset by improved exports. However, confidence could strengthen if the index holds above 50.0 next month.
Meanwhile, the Brexit story is not over yet. It could be expected that there will be a long period of volatility around the decision as well as implementation of the UK parting ways with the EU. The Bank of England Governor Mark Carney highlighted the central bank would probably need to pump more stimulus into Britain's economy during the summer in order to cope with the shocking Brexit referendum results.
© Dukascopy Bank SA