Investing.com - Manufacturing activity in the U.K. expanded at the fastest rate since June 2014 in October, boosting optimism over the country’s economic outlook and supporting the case for higher interest rates, industry data showed on Monday.
In a report, market research group Markit said that its U.K. manufacturing PMI rose to a seasonally adjusted 55.5 last month from a reading of 51.8 in September. Analysts had expected the index to decline to 51.3 in October.
The 3.7 point gain in the PMI level was one of the steepest registered during the near 24-year survey history.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
October saw solid improvements in the rates of growth in output and new orders, in both cases the sharpest since the middle of last year.
The domestic market remained the prime source of new contract wins, while back-to-back increases in new export business were signalled for the first time since the third quarter of 2014.
Commenting on the report, Rob Dobson, senior economist at survey compiler Markit, said, “Based on historical comparisons, the survey is consistent with a quarterly rate of growth of around 1%, a vast improvement on what we have seen in recent months."
GBP/USD was trading at 1.5491 from around 1.5454 ahead of the release of the data, while EUR/GBP was at 0.7118 from 0.7137 earlier.
Meanwhile, European stock markets were mixed. London’s FTSE 100 shed 0.35%, the EURO STOXX 50 tacked on 0.2%, France's CAC 40 rose 0.15%, while Germany's DAX added 0.45%.