UK PMI Fell Raising Pressure on BoE To Hold Rates

Fresh pressure on the Bank of England to delay raising interest rates has emerged after figures for manufacturing and consumer credit highlighted the weakness of the UK economy.

Until recently, next week’s Bank meeting was widely expected to sanction another rate increase, but weak growth figures on Friday made such a move less likely and data on Tuesday seems to rule it out almost entirely, sending the pound to a three-month low against the dollar.

The latest monthly snapshot of industry from the Chartered Institute of Procurement and Supply and the information company Markit (CIPS/Markit) showed that the slowing of the economy recorded in the first quarter of 2018 continued into the second quarter.



The closely watched purchasing managers’ CIPS/Markit fell from 54.9 in March to 53.9 in April. While any reading above 50 points to growing manufacturing output, the rate of expansion was the weakest in 17 months.

Meanwhile, the Bank of England’s monthly money and credit statistics detected a marked waning in consumer appetite for unsecured borrowing in March. Lending to consumers stood at just £300m in March, the smallest increase since November 2012 and well down on the monthly average for the latest six months of £1.5bn.

The dramatic decline in consumer borrowing follows a clampdown by the chief financial regulator, the Financial Conduct Authority, on bank lending to consumers, which grew by 10% or more on average between 2014 and 2017. In March, the annual growth rate in consumer credit dropped from 9.4% to 8.6%.

via The Guardian

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza