Weak UK manufacturing growth weighs on pound

Posted On 02 Mar 2016

Tag: GBP

The British pound hovered close to seven-year lows below $1.40 versus the US dollar after Manufacturing PMI data published on Tuesday showed the weakest manufacturing growth in the UK in three years. This contrasted with better manufacturing activity data from the US.

The pound has been weakening recently after being driven down by concerns that Britons may vote to leave the European Union in a referendum on June 23.

Brexit fears are also pushing back UK rate hike expectations and the Bank of England is not likely to make a move while there is political uncertainty.

The manufacturing PMI data were lower than forecasts and raised concerns that the UK economic recovery was still very slow. The PMI index posted its lowest reading since April 2013 at 50.8 in February, down from 52.9 in January.

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