The pound has hit its highest value against the dollar for almost six years, which experts say is due to the boom in the UK’s manufacturing sector.
The pound rose to $1.7145, with the expectation of a rate rise this year, further indicating that the UK’s economic recovery is stabilising.
June’s Markit/CIPS purchasing managers’ index (PMI) for the manufacturing sector was up to 57.5 from 57.0 in May – the fastest expansion in seven months.
Rob Dobson, senior economist at Markit, said:
“UK manufacturing continued to flourish in June, rounding off one of the best quarters for the sector over the past two decades. With levels of production surging higher, and order books swollen by a further upswing in demand from both domestic and overseas clients, job creation accelerated to its highest for over three years.”
Although manufacturing output growth slowed down slightly last month, output has now increased for 16 months in a row.
Other positive signs of recovery are the rate of GDP growth, which has increased by 0.8% this quarter, and the fastest expansion of business investment in two years.
Howard Archer, chief UK and European economist at IHS Global Insight, said:
“The best news in the GDP data was the marked upward revision to business investment. This not only indicates that growth is becoming less centred on consumer spending but could also have positive implications for future productivity growth.”
Image by Barnshaws Metal Bending