U.K. PMI Manufacturing Contracts For Third Month

The U.K.PMI Manufacturing gauge fell to 44.3 in July from 45.9, which was the lowest in a decade. It was the third consecutive month the measurement fell below the 50 boom/bust level and provides further evidence the British economy is heading for a recession. After closer inspection of the breakdown, we see that new orders fell to 40.5 from 43.7 signaling that further weakness in the sector is forthcoming. The sector also showed employment slipping to 43.3 from 46.2 which will further weigh on the U.K. labor market which saw jobless claims rise by 15,500 in June. The BoE will be hard pressed to raise rates at their upcoming policy meeting, despite the efforts of hawk Tim Besley to convince his fellow committee members that price stability should be their focus. – [I]John Rivera, Currency Analyst[/I]