Investing.com - Manufacturing activity in the UK unexpectedly increased in August, hitting a four-month high and bolstering optimism over the British economy, industry data showed on Friday.
In a report, market research group IHS Markit said that its UK manufacturing PMI rose to a seasonally adjusted 56.9 last month from a reading of 55.3 in July which was revised from an original 55.1.
Analysts had expected the PMI to slip to 55.0.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
IHS Markit highlighted that the improvement was due to a strengthening of new order inflows and that a broad-based expansion was seen across all product categories.
The research group also added that input price inflation accelerated for the first time in seven months.
“The key question is whether this positive start to the second half of the year can be sustained,” Rob Dobson, senior economist at survey compiler IHS Markit, said.
“This is looking increasingly likely during the near-term, given the breadth of the expansion,” he added.
“The survey data suggest that the manufacturing economy remains in good health despite Brexit uncertainty, and should help support on-going growth in the economy in the third quarter, which will add fuel to hawkish policymakers’ calls for higher interest rates,” Dobson concluded.
After the report, GBP/USD was trading at 1.2922 from around 1.2918 ahead of the release of the data, EUR/GBP was at 0.9203 compared to 0.9208 prior to the report, and GBP/JPY traded at 142.24 compared to 142.13 earlier.
Meanwhile, European stock markets were trading higher. London’s FTSE 100 rose 0.18%, the Euro Stoxx 50 gained 0.41%, France's CAC 40 advanced 0.72%, while Germany's DAX traded up 0.51%.