Investing.com - Manufacturing activity in the U.K. slowed slightly in October, but maintained a solid rate of expansion at the start of the fourth quarter, according to survey data released on Tuesday.
The Markit U.K. manufacturing purchasing managers’ index came in at 54.3 in October down slightly from 55.4 in September.
Economists had expected a reading of 54.5.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
Despite factory activity slowing from September’s highs, growth of output and new orders continued to defy expectations, rising at marked rates and supporting the fastest job creation in a year.
But the report noted the impact of the sharp fall in the pound on manufacturers.
“The main topic of the latest PMI survey was, however, the impact of the sterling depreciation on manufacturers. On the positive side, the boost to competitiveness drove new export order inflows higher, providing a key support to output volumes”, Rob Dobson, Senior Economist survey compiler Markit said.
“The down-side of the weaker currency is becoming increasingly evident, however, with increased import prices leading to one of the steepest rises in purchasing costs in the near 25-year survey history”.
GBP/USD was trading at 1.2252 from around 1.2255 ahead of the release of the data, while EUR/GBP was at 0.8976 from 0.8973 earlier.