- Rob Dobson, IHS Markit
Confidence in the UK's manufacturing sector posted a surprise fall in November, as the weak pound exerted pressure on manufacturers buying materials from abroad.The manufacturing purchasing managers' index fell to 53.4, down 0.8 points since last month, although rates of expansion are still "solid", according to survey compiler IHS Markit. This was the second month of decline in confidence in UK manufacturing, although PMI remained well above the neutral 50 point, indicating that sentiment is still broadly positive.
UK manufacturing PMI dipped below 50 in July as panic over the implications of the vote to leave the European Union took hold, but confidence quickly recovered to pre-referendum levels. However, the one definite effect of the Brexit vote has been the fall in the value of the pound. The recent fall in the Pound has boosted exports, while import prices are seen creeping higher and may in time offset the positive effect of a weaker currency, especially given that export order book growth has already waned markedly from September's five-and-a-half year high.
© Dukascopy Bank SA
© Dukascopy Bank SA