Middle East conflict hampers rebound in UK manufacturing
Susannah Streeter, head of money and markets, Hargreaves Lansdown: ‘’These PMI numbers show how tricky is may still be for the economy to find a fast route out of its sluggish state with firms not just constrained by productivity issues but geo-political events. Although activity is still expanding in the manufacturing sector, shipping delays due to attacks in the Red Sea are holding back growth.
There will still be some relief that the underlying trend is still positive and it’s another piece of the jigsaw indicating that things are starting to look up for the UK economy. They come hot on the heels of an improved snapshot for the first three months of the year. The acceleration in activity isn’t sharp enough to warrant fresh wariness among bank of England policymakers but it does offer fresh evidence that recession and stagnation are in the rear-view mirror.
Today’s data comes amid an improved forecast from KPMG for the outlook for the economy over the next two years. It’s expecting a pick-up in business investment and increasing consumer confidence. With interest rate cuts set to come by early autumn and the potential for a new government with an agenda for increasing investment, with a sharp eye on financial stability, it seems the sun may finally be peeking through what’s been a very clouded outlook for the UK. However, with the conflict in the Middle East unlikely to see a resolution any time soon, we are still set for increased growth to be in go-slow mode.”
