UK manufacturing catches a cold from Eurozone
Britain’s strong recovery is under threat from the economic troubles in Europe, as data released yesterday showed the UK’s manufacturing sector continuing a sharp decline that began at the start of summer.
The purchasing managers’ index compiled by Markit fell to 51.6 for September, below market expectations and a drop from August’s 52.2.
Any figure above 50 signifies growth, so the number indicates the manufacturing sector is growing at its slowest pace for more than a year.
Factory output had been expanding rapidly over the past year, the survey showed, but the sector had slowed sharply over the summer, coinciding with falling economic growth in the Eurozone.
Official data show the UK economy grew by 3.2 per cent in the 12 months to June, but the slowdown in manufacturing combined with weak exports to the Eurozone could undermine that rapid recovery.
This will come as bad news for chancellor George Osbourne whose claim that the UK is the fastest growing economy in the G7 may soon be out of date. The health of the economy will also be vital for his re-election chances come May.