February is proving to be another positive month for the UK economy as better-than-expected data brightens the pound & indicates a rebound after a fourth-quarter halt.
The UK Markit Manufacturing PMI for February rose from 50 to 51.9.
According to IHS Markit’s flash purchasing managers index, there were also signs of a hit to supply chains from coronavirus.
Manufacturers’ input stocks declined at the fastest pace in more than seven years. Further chaos took place after a few orders from clients in Asia were cancelled with extended shutdowns in China.
Despite this, manufacturing output still grew at its fastest in 10 months, counteracting a decline in services. According to the report, growth expectations in the private sector gained slightly.
By approximately 9:30am, GBP managed to hold onto some of its gains and traded at $1.2922.
Tim Moore, an economist at IHS Markit, said:
The recent return to growth signalled by the manufacturing and services PMIs provides a clear indication that the UK economy is no longer flat on its back.
Since the UK election in December, there has been a depletion in political uncertainty, which has resulted in higher business activity and more spending.
This and many other similar reports, therefore, support the case for the Bank of England to withhold from cutting interest rates any time soon.
According to the report, IHS Markit’s index for output across the whole economy was unchanged at 53.3 in February.
Up nearly 0.4%, the pound hit the day’s high of $1.2928 against a weaker US dollar.
Against the euro, sterling rose back to the session’s high of 83.68 pence.
Keeping up-to-date with news & foreign currency exchange rates will give you a good foundation for trading and allow you to better identify good investments in the long run. Trade with a simple, yet effective broker, fund your account today.