The British pound steadied off after dipping against the dollar following a disappointing report indicating manufacturing production in the UK fell more than expected in August, highlighting the sluggish economic recovery.
The UK National Statistics office reported a drop of 0.3 percent on a month-over-month basis, surpassing the 0.2 percent predicted by economists. July actually saw a gain of 0.1 percent.
Change in the total inflation-adjusted value of output produced by manufacturers; Manufacturing makes up around 80% of total Industrial Production and tends to dominate the market impact;
GBPUSD dipped after the data release from a high of 1.5661 down to 1.5610 but soon recovered back up to 1.5651.
Today’s data adds to a string of recent weak economic data. Last week teh Bank of England expansion its monetary stimulus program with the aim of preventing the economy from slipping back into recession.
What the bank did was raise the ceiling for bond purchases to 275 billion pounds from 200 billion pounds, marking the biggest expansion since the first round of stimulus in March 2009.
“The recent increase” in quantitative easing “is welcomed, but more radical measures are needed,” British Chambers of Commerce Chief Economist David Kern said in an e- mailed statement.