Forexpros — Manufacturing activity in the U.K. fell unexpectedly in August, dropping to the lowest level since May 2009, official data showed on Thursday.
In a report, market research group Markit said that its U.K. manufacturing PMI declined to a seasonally adjusted 49.0 in August, down from a reading of 49.4 in July, whose figure was revised up from 49.1.
Analysts had expected the manufacturing PMI to ease up to 49.5 in August.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
Production fell for the first time since May 2009, as new order inflows declined at the most marked pace in almost two-and-a-half years.
Business conditions in the UK manufacturing sector deteriorated further in August, while the trend in new export business was also substantially weaker than one month ago.
Commenting on the report, David Noble, chief executive officer at the Chartered Institute of Purchasing & Supply, said, “Falling output signals a U.K. manufacturing sector in reverse-drive.”
“The weakness of the U.K. consumer market looks like it is here for the long haul,” Mr. Noble added.
Following the release of the data, the pound was down against the U.S. dollar, with GBP/USD shedding 0.15% to trade at 1.6222.
Meanwhile, European stock markets were broadly lower. The EURO STOXX 50 fell 0.95%, France’s CAC 40 dropped 1%, the FTSE 100 declined 0.4%, while Germany’s DAX sank 1.35%.
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