UK PMI Manufacturing was finalized at 52.1 in July, up from June’s 50.9. Production growth was the fastest since February 2022, while input price inflation hit an 18-month high.
Rob Dobson, Director at S&P Global Market Intelligence, noted that UK manufacturing has started the H2 on an “encouragingly solid footing.” July saw increased production and new orders, with staffing levels rising for the first time since September 2022. Confidence reached its highest level in two-and-a-half years, with 60% of companies expecting output to rise over the next 12 months.
However, inflationary pressures are a “blot on the copybook”, with input costs rising at the highest rate in 18 months. The ongoing Red Sea crisis and related freight issues are driving up prices. Selling prices also increased at the fastest rate since mid-2023. BoE is likely to remain cautious about loosening monetary policy due to these inflationary pressures “pivoting away from services and towards manufacturing.”
