UK manufacturing growth slows to 26-month low

Growth in British manufacturing activity unexpectedly slowed to its lowest level in 26 months in June, data from Markit and the CIPS showed on Wednesday.

The closely-followed UK manufacturing purchasing managers’ index (PMI) declined to 51.4 last month, down from a revised reading of 51.9 in May (first published as 52.0).

While still growing - indicated by any figure over the 50 mark - economists were expecting an increase to 52.5.

This was the weakest rate of expansion since April 2013, and was a result of moderating growth in production and new orders.

“The UK manufacturing sector had a disappointing second quarter overall,” said Rob Dobson, senior economist at Markit.

“Growth trends in output and new orders were the weakest since the opening quarter of 2013, as a strong sterling exchange rate and subdued demand from mainland Europe offset the continued solidity of the domestic market.”

He said that export trade was likely to remain a drag on the economy, given the uncertainty surrounding the Greek debt crisis.

“This makes it difficult to gauge fully any possible knock-on effects for the UK’s trade with the euro area particularly in relation to impact from the euro-sterling exchange rate,” Dobson said.