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UK Manufacturing PMI Drops

James Boston
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UK Manufacturing PMI Drops

The British economy experienced an unexpected deterioration in it’s manufacturing sector according to the August numbers just published by Markit Economics. The UK Manufacturing PMI now stands at 52.5, this is a fall from the revised July number of 54.8 and somewhat surprised markets that were expecting a rise in the figure to around the 55.0 level. The UK, like most Eurozone economies, is feeling the effects of the recent round of sanctions introduced against Russia in response to it’s activities in the Ukraine. Additionally, there is a lull in confidence in this otherwise strongly performing economy as uncertainty remains around the Scottish separation referendum due later this month.

Some minor July numbers have also been published out of the UK this morning. The Mortgage Approvals data recorded a slight fall on the month from a revised 67.085k in June to the just announced 66.569k July number, the consensus estimate for this figure was close at 66.600k. Actual Mortgage Lending has been reported as £2.30Bn for the month of July, for comparison purposes the revised June figure was £2.20Bn and analysts had been expecting the July number to fall to just £2.00Bn.

On the Consumer Credit side an expansion was obvious, the July number has just been reported as £1.1Bn compared to a revised June figure of £0.7Bn, the consensus estimate was for this to fall to around £0.55Bn.

The Bank of England (BoE) also took the opportunity to publish the Broad Money Supply update for July. The M4 Money Supply expanded by 0.3% month on month compared to growth of just 0.1% in the month of June, an expansion of 0.5% had been expected. When measured on a year on year basis the M4 Money Supply is showing a contraction of -1.0% in comparison to the revised reading of -0.7% announced for June.

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