A dreadful September for Britain’s manufacturers today put pressure on the Bank of England to return to the printing presses to prevent slim recovery hopes from fizzling out completely.
The latest snapshot of manufacturing health from the Chartered Institute of Purchasing and Supply and data provider Markit showed a worsening decline for the sector last month, as firms reported slower export orders and “subdued” domestic markets.
The poor news from the UK followed similarly worrying data from manufacturers in China, the worst quarter for eurozone firms for more than three years and waning confidence in Japan.
In the UK, firms are cutting jobs at the fastest pace in five months despite a slight rise in overall orders. Markit’s chief economist Chris Williamson said that the UK’s manufacturers had “lost momentum again”. He added: “In this global economic environment, manufacturers look certain to struggle and the sector is unlikely to act as a driver of economic growth.”
The monetary policy committee meets this week with most analysts expecting it to keep quantitative easing on hold at £375 billion. The MPC is also set to leave interest rates at their record low of 0.5%.
ING Bank’s James Knightley said: “[Today’s figures] will keep the pressure on the Bank to offer more stimulus and, with sterling having pushed higher, more QE in November looks likely to help soften the currency and provide a further boost to asset markets.”
