"UK manufacturing continued to flourish in June, rounding off one of the best quarters for the sector over the past two decades"
- Rob Dobson, senior economist at Markit
Manufacturing activity in the U.K. rose at the fastest pace in seven months in June, creating new jobs in the sector and fuelling optimism about the nation's economic prospects. The Markit/CIPS UK manufacturing Purchasing Managers' Index surged more than expected to 57.5 in June up from 57.0 a month earlier, reaching the highest level since November. In contrast, analysts had estimated a fall of the index to 56.8. The data adds to evidence that the U.K.'s consumer-led recovery is becoming more balanced and sustainable. Britain's industry experienced the strongest annual growth in more than three years in April, while data released last week highlighted the importance of business investment for a strong growth in the first quarter, when the nation's economy expanded 0.8%. The recent numbers are likely to reassure officials, who have wanted to see a more broad-based recovery on the back of greater exports, manufacturing activity and business investment. The continued strength of U.K. business activity indicators increases likelihood that the BoE will hike interest rates from ultra low level of 0.50% before 2015.
The Pound strengthened versus the U.S. Dollar immediately after release of data, with GBP/USD inching higher 0.15% to trade at 1.7131 compared to 1.7103 ahead of data.
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