- Howard Archer, IHS Global Insight's
The cable remained around a two-week low on Tuesday following mixed data from the U.K. industrial sector, while markets were focusing on the MPC members hearing amid latest allegation of manipulation on the financial market. On Monday the Sterling managed to appreciate only against the Japanese Yen, while lost almost a half per cent versus the single currency and the greenback.
Last week's Markit report showed manufacturing activity expanded in line with analysts' forecasts in February. The latest data, however, showed that the nation's factory output expanded above analysts' forecasts in January, in a sign of the ongoing recovery. Production rose 0.4% from December, when it advanced an upwardly revised 0.4%. The figure was stronger than analysts expected. A broader industrial production, which includes the value of output by manufacturers, mines and utilities, posted a modest 0.1% growth instead of 0.3% expected by markets and down from December's 0.5%. While figures also showed that employment stood at the highest since May 2011, the total output is still 10% below its pre-recession peak.
Earlier this week the British Chambers of Commerce pointed out that manufacturing production plays a significant role in sustaining Britain's economic recovery. A persistent strength of the Pound, however can become a problem for the U.K. manufacturers.
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