- Rob Dobson, IHS Markit
The Manufacturing Purchasing Managers' Index climbed to 56.1 in December, up from 53.6 in November, official figures revealed on Tuesday. Meanwhile, market analysts anticipated a slighter decrease to 53.3 during the reported period. UK manufacturing activity was also well ahead the long-term average of 51.5, pointing to a rise of confidence in the sector. The December PMI was supported by higher exports, which advanced at the strongest rate since 2014, as the Sterling continued to boost overseas demand. Order backlogs also made a slight rise for the first time in three years, which is expected to support an increase in confidence in trends of near-term production. This was the fifth month of growth in employment and capacity that stimulated pace of job expansion in the last 14 months. The increase in input costs remained unchanged in December, though it was slower than in October. Output costs also increased for the eighth successive months.
The data is set to sustain confidence in the PMI outlook and keep the Bank of England's key interest rates at the present levels amid higher inflation and strength in the services sector. After the release, the Euro slid against the Pound to trade at 0.8470, although the Cable traded at 1.2300 on the US Dollar's broader strength.
© Dukascopy Bank SA