UK Industrial Sentiment Drops
The Confederation of British Industry (CBI) has just released details of this month’s Industrial Trends Survey for Orders. The index has taken a surprise plunge on the month to read at -4 compared to the August recording of 11, this has taken market analysts by surprise as a positive figure of 9 was expected this month.
This is a minor data point in the great scheme of things and is more reflective of sentiment than actual empirical weakness, it does however represent a dramatic change in mood in the UK’s manufacturing sector and it is difficult at this stage to pinpoint which area is hampering confidence. It is an orders based figure so one of two things might be driving the negative sentiment. Firstly, weak international demand, particularly in the face of Russian sanctions could be causing some concern and no doubt a weakening of the Euro relative to the Pound might well be adding to this. Secondly, today’s Scottish referendum on independence holds the potential to dramatically affect the British economy, uncertainty around the outcome may have caused the postponement of some orders.
It’s not all bad news this morning for the UK economy, the consumer sector is continuing to expand according to the August Retail Sales data released earlier. Year on year the index has expanded 3.9% compared to a figure of just 2.5% in July, this is welcome growth but markets were hoping for more, the expected figure was 4.1%. Month on month however the expansion figure met the expectations at 0.4%, this follows a July over June report of 0.0% growth. Core Retail Sales, when fuel sales are excluded, have been reported as expanding 4.5% year on year to August, this is an improvement over the July reading of 3.3% but falls short of the expected 4.8% number. Month on month the Core number actually fell back, the latest reading is just 0.2% compared to 0.4% in July.
Sorry. No data so far.