Duncan Brock, a Group Director at the Chartered Institute of Procurement and Supply, commented: “The UK manufacturing sector continues to suffer the slings and arrows of outrageous fortune as the harsh realities of Brexit uncertainty, challenges in the global economy and a weak pound affected confidence, jobs and overall activity.”
The euro further benefited from the release of the Eurozone’s year-on-year CPI figures for February today, which increased to 1.5 percent. Core CPI figures, however, eased below expectation, muting some gains for the single currency.
Germany’s month-on-month retail sales figures for January increased to 3.3 percent against December’s -4.3 per cent, providing the single currency with some uplift.
Claus Vistesen, Chief Eurozone Economist at Pantheon, remained cautious, saying: “We suspect that seasonals are playing tricks again here. On the face of it though, it is consistent with our forecast that growth in consumers’ spending, especially in goods, will pick up in the first half of the year, but these growth numbers won’t be sustained.”
Today also saw the printing of Germany’s Markit manufacturing PMI for February, which continued to show that the German manufacturing sector is in a state of contraction by remaining at the consensus of 47.6.
In Brexit news meanwhile, Sterling failed to benefit from reports that Labour could withhold its support for Prime Minister Theresa May’s withdrawal deal unless there is a second referendum.
Labour backbenchers Peter Kyle and Phil Wilson proposed the compromise amendment, which may be put to a parliamentary vote on the 12 March, the same day Mrs May will attempt to get her Brexit deal through the House of Commons.
Mr Kyle said: “I have every reason to believe that this will get the necessary support when the time comes … The amendment is full square within the policy and stated objectives of Jeremy and the party on a second referendum.”
The GBP/EUR exchange rate is likely to remain fixated on Brexit developments today, and with any signs of weakening chances of a no-deal Brexit, the pound could quickly claw back its minor losses.
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