Investing.com - Manufacturing activity in the U.K. expanded at the slowest rate in nearly three years in February, as output growth eased sharply, industry data showed on Tuesday.
In a report, market research group Markit said that its U.K. manufacturing PMI fell to a seasonally adjusted 50.8 last month from a reading of 52.9 in January. Analysts had expected the index to inch down to 52.2 in February.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
Output growth eased sharply, as levels of incoming new business showed little-movement on one month earlier. The slowdown was also reflected in the labour market, with job losses registered for the second straight month.
Both the capital and consumer goods industries saw levels of total new business decline in February, reflecting subdued trends in domestic and foreign demand.
The level of new export business placed with UK manufacturers declined for the second straight month in February.
Commenting on the report, Rob Dobson, senior economist at survey compiler Markit, said, “The near-stagnation of manufacturing highlights the ongoing fragility of the economic recovery at the start of the year and provides further cover for the Bank of England’s increasingly dovish stance.”
GBP/USD was trading at 1.3918 from around 1.3944 ahead of the release of the data, while EUR/GBP was at 0.7809 from 0.7793 earlier.
Meanwhile, European stock markets were broadly higher. London’s FTSE 100 ticked up 0.3%, the EURO STOXX 50 rose 0.95%, France's CAC 40 added 0.3%, while Germany's DAX rallied 1.1%.