Investing.com - Manufacturing activity in the U.K. unexpectedly increased in September hitting its highest level since mid-2014, industry data showed on Monday.
In a report, market research group Markit said that its U.K. manufacturing PMI jumped to a seasonally adjusted 55.4 last month from a reading of 53.3 in August.
According to Markit, that was the highest level since June 2014.
Analysts had expected the index to drop to only 52.1 in August.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
Markit indicated that growth of output, new orders and employment all strengthened and pointed to the fact that the weak exchange rate drove export orders and input prices higher.
“Rates of expansion in output and new orders accelerated further, rising at rates rarely achieved since the middle of 2014,” the report said.
Rob Dobson, senior economist at survey compiler Markit, qualified the recovery from the July low after the U.K. decided to leave the European Union as “encouragingly strong” and suggested that it would “provide a further positive contribution to GDP in the third quarter”.
“The weak sterling exchange rate remained the prime growth engine, driving higher new orders from Asia, Europe, the USA and a number of emerging markets,” Dobson noted.
“The domestic market is also still supportive of growth, especially for consumer goods,” he added.
Immediately after the report, GBP/USD was trading at 1.2864 from around 1.2856 ahead of the release of the data, EUR/GBP was at 0.8732 compared to 0.8738 prior to the report, and GBP/JPY traded at 130.38 compared to 130.43 earlier.
Meanwhile, European stock markets were trading higher. London’s FTSE 100 rose 1.13%, the Euro Stoxx 50 gained 0.44%, France's CAC 40 advanced 0.35%, while Germany's stock market was closed for a holiday.