UK manufacturing grows in January

New data from the Chartered Institute of Purchasing Supply and the RBS, released Thursday, put its main index of manufacturing activity in January up from December, with the January figure at 52.8. December’s number, which was revised upward, was 52. Analysts had expected that the January figure would drop to 51.7.

Growth was evident all sectors, and orders were see to increase in both the domestic and foreign markets. Foreign orders were especially robust from China and India. There was also higher demand from the United States, although sterling strength was seen to be holding US business back to an extent.

CIPS/RBS also reported that employment in the manufacturing sector was up a bit in January after declines in November and December, despite a complaint from the British Chamber of Commerce that interest rate hikes had cost a loss of 8,000 manufacturing jobs in January.

With data on the services sector due on Monday, the news out of the manufacturing sector sent sterling higher versus the euro and the US dollar after analysts said that the unexpected growth makes it more likely that the Bank of England will raise interest rates again next month.

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