Britain's manufacturing sector posted its best performance in March for more than a year, an industry survey revealed today.
The Purchasing Managers' Index (PMI) for manufacturing inched up to 50.7 in March from a revised 50.2 in February, according to the Chartered Institute of Purchasing and Supply.
It was the highest PMI reading since February 2001 and the second month in a row that it had exceeded the 50 no-change mark, signalling an expansion of activity. However, the figure was still slightly below the consensus forecast of 50.9.
The PMI is still in line with just a slow turnaround in the manufacturing sector but at least the headline number is above its euro zone counterpart, said Bank of America economist Ms Deborah Reed.
Other data showed net consumer credit hit its second-highest level on record in February, a factor that is likely to weigh heavily on the Bank of England, which meets later this week for its monthly rate review.
Although the Monetary Policy Committee is widely tipped to leave rates unchanged at a 38-year low of 4 per cent on Thursday, it is likely to start reversing last year's rate cuts in coming months. Financial markets are betting on rates pushing up to about 5.25 per cent by December.
Manufacturing was a key factor behind the Bank of England rate cuts last year and recovery here will be instrumental to the tightening cycle, said Reed.