- Rob Dobson, senior economist at Markit
More evidence the Bank of England can raise interest rates sooner than expected occurred on Monday, as manufacturing sector maintained strong momentum, mortgage lending has been cooling down the most in three recent months, and output in production industries entered second quarter on a solid footing. The latest tendencies in the economy analysts have already called an "awful lot healthier" growth in the second quarter, adding more pressure on Mark Carney to shed light on future moves during this week's meeting.
As always, during the first week of the month, Markit releases three reports, showing its indexes of activity in three main sectors of the economy. Activity in the manufacturing sector, which accounts for around 11% of the U.K. total economic output, stood at 57.0 in May from 57.3 a month earlier, coming in line with the consensus forecasts. Despite the deceleration, the gauge remained highly above the 50-mark, which separates growth from contraction, while the fact new orders piled in at a healthy rate and companies hired more staff is drawing bright prospects for the sector. Moreover, the data means the sector has expanded every month since March 2013. While the recent rise in the Sterling made products less competitive globally and dampened the number of new export orders, output within the sector is projected to build up steam during the next three months.
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