UK manufacturing orders rose to the maximum in almost 30 years, with growth recorded in virtually all sectors, according to the Confederation of British Industrialists (CBI).
The indicator rose this month to 16 points from 9 points in May, while analysts on average expected a decrease to 7 points. The index has climbed to the highest level since 1988. The indicator of export orders in June hit a record for 22 years, rising by 13 points. At the same time, the indicator of production expectations for the next three months decreased slightly and amounted to 27 points against 28 in May, while the index of expected selling prices remained at 23 points.
The main reason of pickup in the industrial sector is pound depreciation which boosted the competitiveness of UK goods on the international market. On the other hand, consumer spending recorded declines recently, while house prices fell, signalling waning demand from British consumers.
The British Pound plummeted after the start of Brexit negotiations in the first half of this week but later pared losses as BoE official signalled raising rates may be appropriate to combat inflation. Instability of current government and hard Brexit risks present a challenge for Pound which may renew declines next week.
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