Pound leaps after surge in manufacturing output
Friday 02 May 2014
The latest stunning evidence of a UK manufacturing revival sent the pound surging to a five-year high yesterday as the City upped its bets on early interest rate rises.
Firms saw much faster growth than expected in April and are adding jobs at the rate of 10,000 a month, according to the Chartered Institute of Purchasing & Supply (Cips), whose latest snapshot of industry activity sent dealers piling into sterling. The currency rose to $1.6921 following the release of the figures, its highest since early August 2009, and gained ground against the euro.
The Cips survey showed industry output rising at its fastest pace for eight months as improved demand from domestic and export markets fuelled the recovery.
It comes days after official estimates showed the UK managing 0.8 per cent growth in the first quarter of 2014. The economy is now 3.1 per cent bigger than a year ago, its best showing in more than six years.
The momentum behind manufacturers heightened speculation that the Bank of England’s Monetary Policy Committee will pull the trigger on rate rises more quickly than the spring of 2015, which it has previously guided as “reasonable” timing for rate hikes.
Futures markets now have a rate rise fully priced in for April next year, a month before the general election, although many economists say an earlier move is increasingly likely with unemployment dropping sharply.
The Bank’s stance on policy contrasts with continuing, albeit slowing, stimulus in the United States and expectations that the European Central Bank could embark on some form of quantitative easing to kick-start a sluggish recovery.
- 1 Video of Irish 'professional boxer' fighting Istanbul neighbourhood goes viral in Turkey
- 2 Novel Scarlett Johansson tried to ban, Grégoire Delacourt’s The First Thing You See, to be published in UK
- 3 A pint of water every day is the key to losing weight, scientists say
- 4 Russia 'accidentally reveals' number of its soldiers killed in eastern Ukraine
- 5 Carol Vorderman reveals she is 'covered in burns' after she fell off her treadmill while running naked
Dresden riots: Protesters in Germany attack refugee buses shouting 'foreigners out'
France train shooting: US soldiers speak of the moment they stopped gunman and 'beat him until he was unconscious'
Labour leadership: Jeremy Corbyn accused of 'deluding' young supporters with 'claptrap'
'Women only' train carriages: Jeremy Corbyn unveils radical move to tackle public harassment
Black holes are a passage to another universe, says Stephen Hawking
Iain Duncan Smith calls for urgent ESA overhaul as part of drive to cut down welfare costs
iJobs Money & Business
£13000 - £25000 per annum: Recruitment Genius: Would you like to be part of a ...
£20000 - £25000 per annum + competitive: SThree: Are you passionate about sale...
£25000 per annum + benefits: Ashdown Group: A large financial services company...
£20400 per annum: Ashdown Group: An established and highly reputable organisat...