Investing.com - The U.K. manufacturing sector continued to expand at a solid clip during September, albeit at a slower pace, industry data showed on Monday.
Market research group Markit said that its U.K. manufacturing PMI fell to a seasonally adjusted 55.9 last month from a reading of 56.9 in August. Analysts had expected the index to inch down to 56.4 in September.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
Production and new orders both rose at above long-run average rates. However, the latest survey signaled that cost inflationary pressures surged higher. This reflected a combination of rising commodity prices, the exchange rate and increased supply-chain pressures.
Commenting on the report, Rob Dobson, senior economist at survey compiler Markit, said, “Although it looks as if the sector made solid progress through the third quarter as a whole, the growth slowdown in September is a further sign that momentum is being lost across the broader U.K. economy."
Data released last week showed Britain's economy grew at its slowest pace since 2013 in the 12 months after last year's Brexit vote, painting a subdued picture as the Bank of England prepares to raise interest rates for the first time in a decade.
The BoE said in September that it was likely to raise borrowing costs in the months ahead if the economy and price pressures kept growing.
GBP/USD was trading at 1.3311 from around 1.3318 ahead of the release of the data, while EUR/GBP was at 0.8820 from 0.8825 earlier.
Meanwhile, European stock markets were broadly higher. London’s FTSE 100 ticked up 0.5%, the EURO STOXX 50 rose 0.3%, France's CAC 40 added 0.1%, while Germany's DAX tacked on 0.4%.