UK PMI was consistent with the expectation that the BoE will remain on hold – ANZ Research

According to the ANZ Research team UK Manufacturing PMI data released yesterday despite showing mounting concerns about rising imported costs was still consistent with the expectations that the BOE will remain on hold.

Key point

At 54.3 vs 55.5 in September, the October manufacturing PMI held near post-Brexit highs and is little changed from a year ago when it was 54.6. October new orders were 56.7 vs 57 in September. The data show that owing to sterling's decline optimism amongst manufactures remains firm, although there are probably mounting concerns about rising imported costs beginning to emerge, which may bite further in the coming months. Optimism, therefore, may be peaking as input prices pick up.

Nevertheless, the data are consistent with the expectation that the BoE will remain on hold when it announces its rate decision on Thursday, although the guidance is likely to be that the MPC retains its easing bias for now.