Investing.com - Manufacturing activity in the UK rose more than expected in July, bolstering optimism over the British economy at the beginning of the third quarter, industry data showed on Tuesday.
In a report, market research group IHS Markit said that its UK manufacturing PMI rose to a seasonally adjusted 55.1 last month from a reading of 54.2 in June.
Analysts had expected the PMI to tick up to 54.4.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
Markit highlighted that solid new order intakes were boosted by strong export performance while job creation was among the best recorded in the past three years.
“The headline PMI signaled a growth acceleration for the first time in three months during July, as new order intakes were boosted by a near survey-record increase in new export business,” Rob Dobson, senior economist at survey compiler IHS Markit, said.
“Although the exchange rate remains a key driver of export growth, manufacturers also benefitted from stronger economic growth in key markets in the euro area, North America and Asia-Pacific regions,” he added.
Dobson also noted in that the report that price pressures saw further easing with input prices showing their weakest pace of increase in over a year.
“If this trend of milder price pressures is also reflected in other areas of the UK economy, this should provide the Bank of England sufficient lee-way to maintain its current supportive stance until the medium-term outlook for economic growth becomes less uncertain,” he concluded.
After the report, GBP/USD was trading at 1.3224 from around 1.3201 ahead of the release of the data, EUR/GBP was at 0.8934 compared to 0.8951 prior to the report, and GBP/JPY traded at 145.84 compared to 145.48 earlier.
Meanwhile, European stock markets were trading higher. London’s FTSE 100 rose 0.70%, the Euro Stoxx 50 gained 0.40%, France's CAC 40 advanced 0.55%, while Germany's DAX traded up 0.41%.