According to the latest UK CBI Industrial Trends Survey, total order books rose to 19 in June, up from 17 in May, hitting the strongest level since May 1988. Export order books also improved to -8, up from -17, hitting the best reading since April 2019. Output prices expectations for the next three months jumped to 48, up from 38, strongest since January 1982.
Anna Leach, CBI Deputy Chief Economist, said: “The rebound in manufacturing activity has gathered pace in June, with output growth accelerating to its fastest pace on record and order books their strongest in over 30 years. Encouragingly, this performance is reflected in the majority of manufacturing sub-sectors and looks set to continue in the coming quarter. However, supply shortages continue to bite, and firms expect that to push through into prices in the months ahead.
ECB: Sept easing package gradually transmitted to the economy
In the accounts of ECB January 22-23 meeting, it’s noted that the package of stimulus measures announced last September “have lowered term premia and contributed to the overall substantial easing in financial conditions.” There were also “indications” that the package was “being gradually transmitted to the economy”.
“Market sentiment had turned positive and risk appetite among market participants seemed strong.” Additionally, “uncertainties were perceived as receding”, mainly due to US-China trade deal and stabilization in economy outlook. But monetary policy “had to remain highly accommodative for a prolonged period of time”, with inflation “still far away” from target, and “robust convergence” of inflation towards target was “not yet assured”.
Meanwhile, “risks remained tilted to the downside” even though they had become “less pronounced”. Also, “it was cautioned that a more optimistic outlook for the economy needed to be communicated carefully in order not to give rise to a premature tightening of financial conditions.”
Full ECB accounts here.