U.K. economy loses steam- CBI Survey

Bank of England (BOE) officials have remained positive over UK's economy, however survey by conference board says otherwise.

Manufacturing output growth has stalled in September, first time in two and half years as orders declined. Export orders have dropped to lowest level in six months.

According to latest survey from conference board,

• Volume not only have slowed, manufacturers expect volume to hit lower over next three months and pace of expectation is fastest since 2013.
• Firms expect average prices to fall further in next quarter, to the greatest extent since August 2009.
• Blames are on weakness from China, stronger Pound.

Key highlights -

• 26% of firms reported that output grew in the three months to September, while 25% said it decreased giving a rounded balance of 1%, marginally below the long-run average (+3%). Manufacturing output is expected to grow a little next quarter (+9%).
• 18% of manufacturers reported that the level of their order books was above normal, while 25% said it was below normal giving a balance of -7%. That is above the long-run average of -15% but much lower than -1% in August
• 7% of firms said their export order books were above average, while 31% said they were below, giving a balance of -24% compared to -8% in August.

Manufacturers reported that they expect average prices to fall in the next three months (-8%).

Pound has fallen further against Dollar, post survey. Initial decline towards 1.54 is possible. Pound is currently trading at 1.544 against Dollar.