- Howard Archer, IHS Global Insight's
Britain's manufacturing sector growth slowed to the lowest level in three months in December, adding to doubts about success of the government's efforts to rebalance the UK economy away from property, services and consumer spending. The headline index, measuring activity in the manufacturing sector, which accounts for around 10% of the nation's economic output, fell to 52.5 in December, compared with 53.3 in both October and November and remained in expansion territory for 22 months in a row. UK manufacturing employment rose for the 20th consecutive month in December. Manufacturing businesses continued to receive new orders, but largely due to domestic demand, rather than export orders. Despite the slowdown in the sector's activity at the end of the year, 2014 appeared to be a strong year for the British manufacturing, said Markit.
Separately, the Bank of England credit report revealed the number of mortgage approvals dropped less than expected in November, but reached the lowest level since June 2013. The number of loan approvals declined to 59,029 in November down from 59,511 in the preceding month. While house prices were still markedly higher at the end of the year than at the beginning, economists expect the period of sharp price acceleration is over.
© Dukascopy Bank SA