Pic By BLOOMBERG
LONDON • UK manufacturing growth remained “solid” in September and inflation pressures built, according to an industry survey.
The findings, in IHS Markit’s monthly purchasing-manager survey, are likely to keep the Bank of England (BoE) on track toward an interest-rate increase. Governor Mark Carney said last Friday that there may be a need for tightening in the “relatively near term”.
While the key factory index slipped to 55.9 from 56.7 in August, that’s still well above the 50 level that divides expansion from contraction. A measure of input costs jumped and factories are passing on at least some of the increase. Output prices advanced at the fastest pace in four months.
BoE officials are counting down to a meeting in November at which they may announce the first increase in interest rates in more than a decade. There is plenty for them to assess, with figures last week showing improving confidence and consumer numbers contrasting with continued sluggish growth and a disappointing current-account deficit.
Markit’s survey showed that increases in new orders slowed in September, though they remained above the long-run average. While some respondents cited a boost from the weaker pound, it was “less prominent as a factor than earlier in the year”.
The pound declined yesterday on concerns that Prime Minister Theresa May’s government is becoming unstable. Sterling fell to US$1.3301 (RM5.63) after the report, the lowest level since Sept 14, and was 0.7% weaker at US$1.3310 as of 10:22am in London yesterday. — Bloomberg