Investing.com - The rate of the expansion in Britain’s factory sector slowed in March, according to data released on Tuesday, but the recovery remained solid and continued to drive strong job creation in the sector.
Markit said that its U.K. manufacturing purchasing managers’ index fell to an eight-month low of 55.3 last month from a downwardly revised 56.2 in February. Analysts had expected the manufacturing index to tick up to 56.7.
The decline was due to slower rates of increase for output and new business. New export orders weakened further, with the March report signaling the slowest pace of growth for ten months.
The report noted that the reading was likely to disappoint markets, but said it should be should be seen in the context of near record growth rates seen in the second half of last year.
"Growth is merely hot rather than scorching, and the take-home messages from the March survey are that the recovery remains solid and continues to drive strong job creation," said Rob Dobson, senior economist at Markit.
Employment in the sector increased for the eleventh consecutive month in March, with the rate of jobs growth staying close to February’s near three-year high.
The report also noted that price pressures continued to ease, as input costs fell and selling price inflation slowed to a seven-month low.
”The Bank of England’s MPC will most likely read this combination of slower but sustained output growth and muted price trends at manufacturers as in line with maintaining their current monetary policy stance,” Dobson said.
The U.K. inflation rate fell to a new four-year low of 1.7% last month, underlining the BoE’s message that there is no rush to raise interest rates.