1 Dec 2014
UK PMI and consumer credit rise – ING
FXStreet (Barcelona) - James Knightley of ING, notes that UK’s manufacturing PMI rises consecutively for the second time, but it is still down from the 56.5 average of 1H14.
Key Quotes
“The UK’s manufacturing purchasing managers’ index has risen marginally to 53.5 in November from an upwardly revised 53.3 reading in October versus the consensus expectation of 53.0. This is reasonably encouraging as it is the second consecutive rise, but is still down on the 56.5 average reading for 1H14.”
“Domestic demand continues to outperform export demand with overseas orders contracting (although at a slower rate than last month). Still, the strength in the domestic story has pushed the employment component up to a four month high, which suggests that the economy continues to create jobs in significant numbers.”
“Meanwhile, mortgage approval numbers continue to fall to stand at 59,400 in October versus 61,200 in September. This is the fourth consecutive decline and is the weakest reading since June 2013.”
“It reflects a number of issues that include the introduction of the Mortgage Market Review that resulted in more checks on income and greater stress testing of affordability, the Bank of England’s efforts to restrict “riskier” lending, talk of higher interest rates and higher property taxes together with the fact that house prices are extremely high.”
“Consumer credit increased by £1.1bn in October and with consumer confidence and employment back at pre-crisis levels there is some hope it could be a decent Christmas trading period for retailers.”
Key Quotes
“The UK’s manufacturing purchasing managers’ index has risen marginally to 53.5 in November from an upwardly revised 53.3 reading in October versus the consensus expectation of 53.0. This is reasonably encouraging as it is the second consecutive rise, but is still down on the 56.5 average reading for 1H14.”
“Domestic demand continues to outperform export demand with overseas orders contracting (although at a slower rate than last month). Still, the strength in the domestic story has pushed the employment component up to a four month high, which suggests that the economy continues to create jobs in significant numbers.”
“Meanwhile, mortgage approval numbers continue to fall to stand at 59,400 in October versus 61,200 in September. This is the fourth consecutive decline and is the weakest reading since June 2013.”
“It reflects a number of issues that include the introduction of the Mortgage Market Review that resulted in more checks on income and greater stress testing of affordability, the Bank of England’s efforts to restrict “riskier” lending, talk of higher interest rates and higher property taxes together with the fact that house prices are extremely high.”
“Consumer credit increased by £1.1bn in October and with consumer confidence and employment back at pre-crisis levels there is some hope it could be a decent Christmas trading period for retailers.”