Best month for UK manufacturing in two years
The month of June saw the best performance in UK manufacturing for two years according to the Markit/CIPS purchasing managers index, also known as the PMI. The index concluded the month at 52.5, a peak that it has not matched since the middle of 2011. It is commonly felt that any figure over 50 is a sign of growth for the near to medium term.
The report which was released by Markit today is just one of many recent positive pieces of data on the UK economy. With the demand for British made products rising both internally and internationally, the outlook for the British economy looks a lot brighter – a feeling that was backed up by Markit senior economist Rob Dobson, who said that he felt the UK GDP would add to its 0.3% growth in the first quarter with a 0.5% expansion in the second quarter.
Additionally, there were more than 58,000 new home loans taken out in May, the highest figure for free and a half years. This was music to the ears of the Bank of England, who today welcomed the new governor Mark Carney. The Canadian’s first day in his new job could hardly have gone any better, with positive data coming in from all angles and the health of the UK economy being far stronger than he had ever anticipated.
However, many threats from abroad still remain, just as his predecessor warned last week. Chinese manufacturing growth continued to slow in June as the world’s second-largest economy looks to be entering into an economic slowdown, as well as a banking crisis. The United States’ central bank, the Federal Reserve, is currently threatening to pull the plug early on it stimulus package, which could result in a global financial “rollback” if pulled too early.