Meanwhile, the depreciation of the rupee supported Indian exporters as survey data pointed to the quickest rise in new business from overseas since January.
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It follows market declines on Monday after PMI figures showed the manufacturing sector, which accounts for around 10% of the United Kingdom economy, endured its sharpest fall for more than three years.
Markit Senior Ecomonist, Rob Dobson, explained that this latest data is in line with the general consensus that “business activity has been adversely affected by the European Union referendum”.
And weak order books and declining volumes among the 600 firms responding indicated worse was still to come, warned Markit/CIPS.
Dobson added the numbers make a case for “swift policy action” in the hope of “restoring confidence”.
There was some reprieve for the manufacturing industry as the slump in the value of the pound continued to help United Kingdom exports.
“India’s manufacturing economy is reviving at the beginning of the second half of 2016 after the slowdown seen in the April-June quarter, as growth in both production and new orders continued to strengthen in July”, said Pollyanna De Lima, economist at survey compiler Markit.
“Employment in manufacturing declined for the seventh month in succession and input-price inflation rose to a five-year high off the back of sterling’s weakness and higher commodity prices”. This was partially helped by a weaker decrease in worldwide demand, as new export orders declined at a slower rate than June’s 43-month record.
In addition new orders fell at a slower pace last month, compared to June, displaying some evidence of resilience from the industry despite concerns over the impact from the Brexit vote.
Data on Friday showed that the region’s moderate recovery was fragile even before the British vote, with economic growth in the second quarter slowing to 0.3 percent from 0.6 percent in the previous three months.
The MPC had been widely expected to cut interest rates last month, but unexpectedly left them unchanged.
Samuel Tombs, chief United Kingdom economist at Pantheon Macroeconomics, said data from the PMI suggests support from the weaker pound is simply not powerful enough to offset a drop in domestic demand. Factories making consumer, intermediate and investment goods all added jobs.
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After hitting a post-Great Recession low, economic activity in the nation’s manufacturing sector continues to grow, but how strong that growth is depends on which report you read.
