UK manufacturing PMI beats expectations, rises to highest level since mid-2014

UK Markit/CIPS manufacturing Purchasing Managers’ Index (PMI) rose to 55.4 from 53.4 in August, beating expectations for a reading of 52.1. UK September manufacturing sector activity surprised the markets to the upside, extending further into the expansion territory, as markets shrug Brexit-related concerns. Upbeat data casts doubts on the prospect of additional Bank of England policy easing at the November MPC meeting.

Manufacturing production expanded at the quickest pace since May 2014. Growth of output, new orders and employment all strengthened, with the weak exchange rate boosting export orders and input prices. Growth was led by the consumer goods sector, where output rose at the quickest pace in one-and-a-half years.

Growth of output, new orders and employment all strengthened, with the weak exchange rate boosting export orders and input prices. Purchasing activity also increased during September. Input buying volumes were raised to one of the greatest degrees over the past two years.

"UK manufacturing sector on course to provide a further positive contribution to GDP in the third quarter," said Rob Dobson, Senior Economist at IHS Markit.