The downturn in Britain's manufacturing sector eased significantly in August as domestic clients placed more orders, an unexpectedly strong purchasing managers' survey showed today, raising the chances that the country is moving out of recession.
The jump in the Purchasing Managers' Index (PMI) will bolster expectations that the Bank of England will shy away from stepping up its stimulus for the economy on Thursday and stick to its plan to buy £50bn of gilts by November.
However, the pressure remains on the government to take bolder steps to boost an economy that has not fully recovered the output lost in the wake of the 2008-2009 financial crisis, and has been stuck again in recession since late 2011.
The Markit/CIPS manufacturing PMI jumped to a four-month high of 49.5 in August from a downwardly revised 45.2 in July, the lowest level since May 2009.
The August figure still points to ongoing contraction.
The stagnation in new orders was a marked improvement from the slump seen in the prior month, with the orders index jumping to 49.9 from the 41.8 in July – the biggest one-month gain in the survey's history.
City A.M. Reporter