Daily Times

British factories lost momentum in July and manufacturers were their most downbeat in nearly two years, a survey showed on Wednesday, raising fresh questions about the need for an expected Bank of England interest rate hike on Thursday.

The IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) slipped to its second-lowest level since late 2016 at 54.0, down from 54.3 in June and weaker than a median forecast of 54.2 in a Reuters poll of economists.

Rob Dobson, an IHS Markit director, said the sector — which accounts for 10 percent of the British economy — had provided no meaningful boost to economic growth so far this year.

“The financial markets still seem to have an interest rate increase nailed on for August,” he said, referring to Thursday’s policy announcement by the BoE.

“However, if the combination of weaker growth and a softening of pipeline cost pressures at manufacturers is mirrored in the larger service sector, the Bank of England’s decision will be far from unanimous and they may even yet find some cause for pause,” he said.

Published in Daily Times, August 2^nd 2018.