BoE less likely to extend QE after impressive manufacturing data

inspector_monkfish

10:01 03Aug09 GBP/USD: 1.6850 Offers Tested, UK Mfg PMI Shock Underpins

London, August 3.

Cable has tested 1.6850 offers after building on gains fuelled by July"s much better-than-expected UK manufacturing sector PMI--which came in above 50 (a number above 50 indicates expansion, below 50 contraction). The data surprise has lessened the probability of the BoE extending its QE Asset Purchase Programme. It has also brought the question of when the BoE might hike Bank Rate into focus.

Bank Rate has been held at 0.5% since it was cut to that level in March. It was 5.0% 12 months ago.

StevieJ

So finally into expansion mode (probably just re-stocking). The US figure is out today, should be interesting.

Some think the recession is about to end - in the UK

UK Recession To End Within 3 Mos, Eurozone To Drag On - Report The U.K. recession is expected to end within just three months, but the outlook is still bleak for the Eurozone whose economies can expect to remain in decline until 2010, advisors BDO Stoy Hayward said Monday.

And more good news for the small fry

UK Smaller Mfg Firms Report Output Declines Easing - Survey Small and medium-sized U.K. manufacturing firms saw declines in orders, output and headcount ease markedly in the three months to July, with many forecasting growth in the next quarter, a survey showed Monday.