Investing.com - Manufacturing activity in the U.K. expanded at a faster rate than expected in July, but still remained near the previous month's two-year low, industry data showed on Monday.
In a report, market research group Markit said that its U.K. manufacturing PMI inched up to a seasonally adjusted 51.9 last month from a reading of 51.4 in June. Analysts had expected the index to rise to 51.6 in July.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
The rate of growth in new orders slowed to a ten-month low, as solid demand from the domestic market contrasted with a further decrease in new export business.
New export orders declined for the fourth straight month in July, mainly as a result of the sterling-euro exchange rate hitting competitiveness in euro zone markets.
Commenting on the report, Rob Dobson, senior economist at survey compiler Markit, said, “Although an uptick in the headline PMI breaks the decelerating trend in UK manufacturing, growth remains near-stagnant and suggests that the sector is continuing to act as a drag on the economy."
GBP/USD was trading at 1.5628 from around 1.5615 ahead of the release of the data, while EUR/GBP was at 0.7019 from 0.7021 earlier.
Meanwhile, European stock markets were mixed. London’s FTSE 100 shed 0.35%, the EURO STOXX 50 dipped 0.1%, France's CAC 40 declined 0.2%, while Germany's DAX inched up 0.1%.