UK manufacturing PMI growth calms down in November, weak pound pressurizes

Growth in U.K.’s manufacturing PMI calmed down during the month of November as factories struggled with surging costs caused by weakness in the British pound after Britain voted to leave the European Union on June 23 this year, which failed to boost export orders as much as in previous months.

U.K.’s Markit/CIPS UK Manufacturing Purchasing Managers' Index (PMI) fell to 53.4 from 54.2 in October, undershooting expectations for a rise to 54.5 in a Reuters poll of economists.

A clear majority of respondents who offered a reason for rising costs pointed to the weakness of the pound, which is down around 19 percent against the U.S. dollar compared with its level before June's vote for Brexit.

"The concern is that higher costs may in time offset any positive effect of the weaker exchange rate, especially given that export order-book growth has already waned markedly from September's five-and-a-half year high," Reuters reported, citing Rob Dobson, Senior Economist, IHS Markit.

Further, the outlook for business investment is another doubt hanging over the British economy next year. The IHS Markit survey showed.