Investing.com - Manufacturing activity in the U.K. narrowly expanded in May, beating analyst expectations for it to remain in contraction for a second month running, industry data showed on Wednesday.
In a report, market research group Markit said that its U.K. manufacturing PMI rose to a seasonally adjusted 50.1 last month from a reading of 49.4 in April which had been the first contraction in three years and was revised up from an initial figure of 49.2.
Analysts had expected the index to advance to 49.6 in May.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
Markit also noted that it added a special question to this month's survey regarding the upcoming June 23 referendum on the U.K.'s membership in the European Union.
Over a third of respondents saw a "detrimental impact on their business from uncertainty regarding the forthcoming vote, within which 8% indicated that the impact was ‘strongly
detrimental’."
Despite edging past the stagnation point in May, Rob Dobson, senior economist at survey compiler Markit, said that the data showed a continuation of a “lackluster start to 2016” and noted that the sector would “remain a drag on the broader economic growth, adding pressure on the service sector to sustain the upturn in GDP (gross domestic product).”
After the report, GBP/USD was trading at 1.4462 from around 1.4466 ahead of the release of the data, while EUR/GBP was at 0.7711, compared to 0.7707 prior to the report.
Meanwhile, European stock markets were broadly lower. London’s FTSE 100 lost 0.46%, the Euro Stoxx 50 fell 0.38%, France's CAC 40 shed 0.35%, while Germany's DAX traded down 0.19%.