U.K. Manufacturing Fell to 3-Month Low

• U.K. Manufacturing Fell to 3-Month Low

The U.K manufacturing sector slowdown to a three-month low in June as uncertainty impact demand amid rising doubts about the economic outlook.

The Purchasing Managers Index plunged from 56.3 in May to 54.3 in June, the IHS Markit reported on Monday in London. While the figure is lower than expected projection, 56.3, it’s still above the 50 level that separate expansion from contraction.

Inconclusive general election and the ongoing Brexit talks have started weighing on companies and households as businesses look to adjust against potential headwinds, especially with rising inflation rate. However, this may strengthen the case for low-interest rate against the pervasive hike expected by the market.

“Increased business uncertainty appears to have led to some delays in placing new contracts,” said Rob Dobson, an economist at IHS Markit. “While the survey data add to signs that the economy is likely to have shown stronger growth in the second quarter, further doubts are raised as to whether this performance can be sustained into the second half of the year.”

Factory orders dipped to 11 months low following slowed growth in new business — domestic and export markets. According to IHS Markit, the slowdown was broad-based with weakness across consumer, intermediate and investment goods industries.

Likewise, factory price continued to drop from their high, with input-cost inflation at a year low and production prices charged increases at their lowest pace since September.

Also, while the pound decline has helped support overseas order export demand remained disappointingly lacklustre, Dobson said.