A Markit survey has revealed that UK factories experienced growth in May for the first time in six months, but there are serious underlying weaknesses in the sector, according to Reuters.
The Markit/CIPS UK Manufacturing Purchasing Managers’ Index indicated that the British economy has not fully bounced back from a slight downturn in early 2018. Manufacturing accounts for around one tenth of total national output.
The Bank of England is currently considering whether to raise interest rates for the second time in a decade. The flatlining economy between January and March 2018 may be a short term phenomenon caused by unseasonably cold weather, or it could be a more lasting situation related to Brexit concerns.
Rob Dobson, Markit director said: “At first glance, the mild acceleration in the rate of output growth and rise in the headline PMI would appear positive. However, scratch beneath the surface and the rebound in the PMI from April’s 17-month low is far from convincing.”
Incoming business has hit an 11-month low, while job creation is the lowest in 15 months. This is said to be due to a loss of spending power caused by growing inflation, in turn caused by the fall in the value of the pound following the Brexit referendum.
