UK manufacturing PMI on down swing; falls to lowest level since early 2013

UK manufacturing PMI decelerates in July to the lowest since early 2013. Data surprised markets to the downside suggesting UK's domestic market was hit by pre-and post referendum uncertainty.

The final Purchasing Managers' Index (PMI) in the UK dropped to 48.2 points in July, as compared to a 49.1 reading in the flash estimate and compared to 52.4 in June. The final reading missed market expectations for a steady print at 49.1. 

The drops in output, new orders and employment were all steeper than flash estimates. The impact of increased business uncertainty on the domestic market offset an exchange rate supported increase in new export business. UK manufacturing employment decreased for the seventh straight month in July. Moreover, the rate of job loss was the second-sharpest for almost three-and-a-half years.

"The weak numbers provide powerful arguments for swift policy action to avert the downturn becoming more embedded and help to hopefully play a part in restoring confidence and driving a swift recovery,” said Rob Dobson of Markit