Investing.com - Manufacturing activity in the U.K. expanded at the slowest pace in 14 months in August, as growth in output and new orders continued to slow, according to data released on Monday.
The Markit U.K. manufacturing purchasing managers’ index fell to 52.5 last month from a downwardly revised 54.8 in July. It was the lowest reading since June 2013. Analysts had expected the index to tick up to 55.0.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
Growth in new export orders slowed to a five month low, as market uncertainty and increasing geopolitical tensions weighed.
The manufacturing sector continued to create employment for the sixteenth straight month, but the rate of jobs growth slowed to a 14 month low, in line with the trend in output and new orders.
“It is… becoming increasingly evident that U.K. industry is not immune to the impacts of rising geopolitical and global market uncertainty, especially when they affect economic growth and business confidence in our largest trading partner the euro zone,” Rob Dobson, senior economist at survey compiler Markit said.
“It therefore looks as if manufacturing will provide a lesser contribution to the U.K. economic growth story in the third quarter than at the start of the year,” he added.
GBP/USD was trading at 1.6626 from around 1.6637 ahead of the release of the data, while EUR/GBP was at 0.7900 from 0.7890 earlier.
Meanwhile, European stock markets were broadly lower. London’s FTSE 100 slid 0.23%, the DJ Euro Stoxx 50 dipped 0.08%, France’s CAC 40 was down 0.37% and Germany's DAX lost 0.29%.