U.K. manufacturing shrank less than expected

British manufacturing activity contracted much less than was initially expected in November, however, domestic and internal demand remains weak, adding to concern that the sector is still fragile. According to the Markit/CIPS, their Purchasing Managers' Index for the manufacturing sector jumped to 49.1 last month, reaching the highest level since August, up from October's downwardly revised 47.3. In the meanwhile, index remains below the 50 mark that separates growth from contraction since April. The reading came above analysts' expectations of an increase to 48.0, however, the gain was limited by the deepening Eurozone crisis, higher oil prices, problems in emerging markets, as well as government's tough austerity plans.

"However, the sector is merely stabilising, suggesting that the economy is still showing no signs of rebalancing towards goods production and exports and that manufacturing is unlikely to help prevent a possible slide back into contraction in the fourth quarter."