Sound bites: a shock drop in the UK manufacturing PMI

The shock drop in the UK manufacturing PMI is another ominous sign for the UK economy. It tolls the bell for another shift back into recession. Double dip is now turning into triple trip recession. Consumer demand is heavily under water, corporate confidence is holed beneath the waterline and the squeeze on public spending is sinking the economy even further. It is up to the Bank of England to provide another lifebelt by way of further quantitative easing. UK monetary policy must stay easy and over-accommodative for a long way into the future. The pound will continue to bear the burden. That’s the good news in this data. The weaker pound will continue to provide more export led stimulus into the economy ahead.

KEY FIGURES FROM MARKIT/CIPS PMI SURVEY
(Previously announced data in brackets)

                                             FEB    JAN           DEC   F'CAST
Manufacturing headline index  47.9   50.5 (50.8)  50.7    51.0
New orders index                    46.6   49.7            51.1  

- First fall in overall activity since November - New orders index lowest since July - Employment index lowest since October 2009