UK Manufacturing Sector Slows Amid Weak Demand and Inflation

The UK's manufacturing sector experienced a slowdown in July, according to the S&P Global Manufacturing PMI reading. The index came in at 51.9, below the consensus forecast of 52.8 and marking a decline from June's 53.2.

Manufacturers cited weaker domestic demand and a continued drag on export markets, particularly from the European Union and Asia, as contributing factors to the slowdown. Input cost inflation accelerated, driven by higher energy prices and supply chain disruptions, which squeezed profit margins and dampened business confidence.

The PMI miss has raised questions about the resilience of the UK's economic recovery, with manufacturing accounting for around 10% of GDP. However, the sector remains in expansion territory, and the labour market stayed relatively firm, with employment levels broadly unchanged.