The weaker pound continued to drive sales and manufacturing activities since the U.K. voted to leave the European Union in June.
The U.K. manufacturing sector came alive in August, reaching a 10-month high of 53.3, after dropping below the 50 level that separates expansion from contraction in July. The figure was better than economists’ prediction of 49.
“We knew it was going to be a bounce. But I wasn’t expecting it to be as strong as this bounce,” Jonathan Bell, chief investment officer at Stanhope Capital Inc, said in an interview on Bloomberg Television’s “The Pulse” with Mark Barton. “There are indications of confidence there and the concerns about the U.K. going into recession in the fourth quarter are maybe being allayed a bit.”
However, Markit has said the surge in new orders is by far the main factor for improvement in exports.
Accordingly, Rob Dodson, a senior economist at Markit said both manufacturers and their clients have started to regain a solid sense of returning to business as usual. “Businesses reported that work that had been postponed during July heightened uncertainty had now been started,” he added.
The pound climbed 0.8 percent after the report was released to reach $1.3249 as of 9:46 a.m. London time.
The embattled currency has fallen more than 10 percent since the Britons voted to leave the European Union.