- Prior 48.0
The slight revision lower marks an 11-month low for the headline reading. That comes as the rates of contraction for output, new orders, and employment all gathered pace in December. While the UK economy does rely more on services, this still isn't a good sign as the plague from Europe starts to spread to the UK. S&P Global notes that:
“A stalling domestic economy, weak export sales and concerns about future cost increases led to the steepest contraction of UK manufacturing production for almost a year in December.
“Manufacturers are facing an increasingly downbeat backdrop. Business sentiment is now at its lowest for two years, as the new Government's rhetoric and announced policy changes dampen confidence and raise costs at UK factories and their clients alike. SMEs are being especially hard hit during the latest downturn.
"This is sending a winter chill through the labour market. December saw the sharpest cuts to staffing levels since February. Some companies are acting now to restructure operations in advance of the rises in employer National Insurance and minimum wage levels in 2025. Global market conditions are also providing a growing headwind, with export sales hit by lower demand from Europe, Asia and the US.
“The survey price gauges edged higher, reflecting rising transportation, labour and material costs, in some cases due to supply chain stresses pushing up global market prices. With costs expected to rise again in early-2025 as the announced Budget changes come into actual effect, the Bank of England is likely to remain cautious about further interest rate cuts despite rising signs of economic difficulties."
