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UK manufacturing slumps for a second month in a row
In March, manufacturing in the United Kingdom went down for a second month in a row, which turned out to be another sign of a slowdown in economic surge.
The output of British manufacturers headed south 0.1% in March having dived by 0.2% in February, which appeared to be the second consecutive dive after almost a year of growth. This sector found itself under pressure from weak output of electrical equipment as well as pharmaceutical products, as the National Statistics Office reported on Thursday.
This weakness in production in the manufacturing industry provoked a 0.1% surge in total industrial production for the month, partly due to a jump in electricity generation during the cold weather month.
Unlike this soar, extremely unfavorable weather contributed to the low productivity of Britain’s construction sector, while housing, public as well as repair work demonstrated a steep dive.
Today's figures actually confirm previous estimates that the British economy appeared to be very sluggish in the first quarter, as some financial analysts pointed out.
The data points to the continuation of the weak economic tendency in Great Britain, and in the future such information will be taken into account when making a decision at the meeting of the Bank of England scheduled for today.
Until recently, market participants were generally confident that the Bank of England would have rates lifted in May, although this confidence faded away after a series of downbeat economic reports. Financial analysts noted that Britain’s major financial institution hesitates between two different directions.
Officials expressed worries that the withdrawal of the United Kingdom from the European Union could hamper the ability of the British economy to cope with higher demand in the long term, suggesting that interest rates need to be higher.
All attention on the market is on the Brexit process. Fears over the no-deal Brexit pushed the British pound deep down yesterday after UK Prime Minister Boris Johnson claimed he was ready to abandon negotiations.
The market sentiment is mixed, and the US dollar is trading near the lowest levels for over two years. Let’s have a look at the main market movements today.
S&P 500 skyrocketed to the all-time high on optimism that Biden’s fiscal stimulus will support economic growth and boost corporate earnings.
PMI reports from the EU, the UK, and the USA will be released during the day!
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.