- Rob Dobson, senior economist at Markit
Business activity in the UK manufacturing sector unexpectedly weakened in December, adding to signs the sector is unlikely to contribute much to overall economic growth. The Markit/CIPS manufacturing PMI dropped to 51.9 last month, sliding to the lowest level in three months, compared with 52.5 in November. Manufacturing failed to add to Britain's economic growth throughout the first three quarters of 2015, with the services industry being the main driver of economic expansion. The output and new order growth slowed further in the reported month. According to the Confederation of British Industries, British manufacturers saw some improvement last month, as export orders rose. However, the CBI warned that the sector predicted a mild contraction over the next three months. Manufacturers continue to struggle with the strength of Sterling and weak demand in the Euro zone, the UK's main trading partner.
A separate report showed, the number of mortgage approvals rose to 70,410 in November, up from a revised 69,867 a month earlier and the highest level since August 2015. Moreover, consumer credit continued to increase, surging by 1.5 billion pounds in November. Persistently low inflation, strong labour market and increased consumer confidence have been underpinning credit flow recently, with household spending being one of the most significant upside drivers for the UK economy.
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