- Rob Dobson, senior economist at Markit
A slowdown is over? Earlier this year the Bank of England predicted the economy will lose some of its value, as recovery is not yet sustained and figures can differ from month to month. While the economy reported some weaker-than-excepted data during January and February, the latest report suggests the deceleration is over.
A report from Markit Economics showed a gauge of manufacturing production improved to 56.9 in February, following the 56.7 reading in January and beating market expectations estimates of 56.8. The nation's factory activity index remained above the key level of 50, which separates expansion and contraction zone for the eleventh straight month over the observed period. Manufacturing sector has been building up steam since April 2013 on the back of improved overall sentiment in the sector and stronger activity that was supported by weaker inflationary pressure and improving economy. At the same time, gains in the manufacturing sector could be even bigger, as the strength of domestic currency has undermined manufacturers export prospects.
An improvement in all pillars of the economy– manufacturing, construction and services sectors would mean there is less spare capacity in the Britain's economy, hence, the central bank can think about starting raising rates.
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