UK DATA: Manufacturing PMI contains concerning details; not enough for Dec cut

Some interesting details in the UK manufacturing PMI. Output prices are at a nine-month low and employment also looks soft. The main weakness that the press release highlights is that small businesses and B2B businesses are the most impacted at present. The manufacturing sector of the UK economy is of course rather small, but the details in this report are concerning. Not enough to change any MPC member’s view of how they will vote in December, and not enough to outweigh concerns about the inflationary impact of the national living wage and employer national insurance increases. But if the wider economy continues on this path there could be an acceleration of rate cuts potentially from Q2-25. Highlights from the press release:
• “Selling price inflation eased to a nine-month low.”
• “Manufacturing employment fell for the second time in the past three months in November, with the rate of job losses the quickest since February. Cuts were linked to concerns over rising cost pressures and weak demand.”
• “Survey respondents linked the declines in output and new orders to delayed investment decisions, cutbacks to new projects due to domestic market uncertainty and rising geopolitical tensions. Some firms noted that announcements in the UK Budget had led to budgets being re-appraised at manufacturers and their clients alike.”
• “Small-scale producers saw the steepest declines in output, total new orders and new export business.”
• “By far the sharpest drop in new work was seen in the intermediate goods industry, suggesting especially weak demand in the B2B sector.”