Britain's factory activity rebounds in August

UK manufacturing sector rebounded unexpectedly from the post-Brexit shock in August, official data revealed on Thursday. The Markit/CIPS Purchasing Managers' Index, a closely followed gauge of factory activity in the region, jumped to 53.3 points in the reported month after hitting a three year low of 48.3 last month. Market analysts pencilled in a slight acceleration to 49.1 in the eight month of the year. The manufacturing sector accounts for only 10% of Britain's economy; however, if the services sector PMI, due next week, supports the same positive trend, analysts would have to reassess the economic impact of the Brexit vote. Back in July, weak PMI data suggested the UK economy contracted at the fastest pace since the financial crisis in 2008-2009 and forced the Bank of England to cut its interest rates by 25 basis points to a record-low 0.25%. 

After the release of the UK Manufacturing PMI for August, the British Pound rose to its highest level since August 26, trading above $1.32 against the US Dollar. After the June 23 referendum, the Sterling dropped more than 10% against the Greenback, as well as the Euro, and failed to recover any ground against other major currencies, as analysts warned of the long-term negative effects of Brexit.