Events that marked the week:
Monday's session brought Net Lending to Individuals data. Total lending to individuals increased by £5.3 billion in January, compared to the average monthly increase of £4.7 billion over the previous six months. The three-month annualised and twelve-month growth rates were 4.2% and 3.5% respectively. Lending secured on dwellings increased by £3.7 billion in January, compared to the average monthly increase of £3.4 billion over the previous six months. The three-month annualised and twelve-month growth rates were 3.4% and 2.8% respectively.
On Tuesday brought UK Manufacturing
PMI data was released. February saw the rate of expansion in the UK manufacturing sector slow back towards the stagnation mark. Output growth eased sharply, as levels of incoming new business showed little movement on one month earlier. The slowdown was also reflected in the labour market, with job losses registered for the second straight month.
At 50.8 in February, down from 52.9 in January, the seasonally adjusted Markit/CIPS Purchasing Manager’s Index posted its lowest reading since April 2013 – the first month of the current 35month sequence of expansion. Analysts were expecting smaller decline to 52.3. The growth rate of manufacturing production slumped to a seven-month low in February, led by sharp decelerations in the consumer and investment goods sectors.
On Wednesday, from the UK Construction PMI data was published.February data highlighted a further loss of growth momentum across the UK construction sector, with output, new orders and employment all expanding at slower rates than at the start of 2016. The headline seasonally adjusted Markit/CIPS UK Construction Purchasing Managers’ Index registered 54.2 in February, down from 55.0 in January and the lowest since April 2015. Increase to 55.5 was forecasted.
Thursday's session was marked by UK Services PMI data. The UK’s dominant service sector lost momentum in February, according to the latest PMI survey data from Markit and CIPS. Growth of both total business activity and new business were the weakest since March 2013, leading firms to raise employment at the slowest pace in two-and-a-half years. The seasonally adjusted Business Activity Index fell to 52.7 in February, from 55.6 in January. This signalled the slowest rise in service sector activity since March 2013. Moreover, the Index was below its long-run trend level (since July 1996) of 55.2. Nevertheless, services output has risen continuously for 38 months, the second-longest sequence of expansion in the survey history.
This week markets will be looking at:
Industrial Production (Wednesday 10:30)
CPI/PPI (Thursday 10:30)
Trade Balance (Friday 1:30)
