{"id":105990,"date":"2021-02-01T11:47:28","date_gmt":"2021-02-01T11:47:28","guid":{"rendered":"https:\/\/fin2me.com\/?p=105990"},"modified":"2021-02-01T11:47:28","modified_gmt":"2021-02-01T11:47:28","slug":"uk-factory-growth-slows-as-covid-and-brexit-combine-ihs-markit","status":"publish","type":"post","link":"https:\/\/fin2me.com\/markets\/uk-factory-growth-slows-as-covid-and-brexit-combine-ihs-markit\/","title":{"rendered":"UK factory growth slows as COVID and Brexit combine -IHS Markit"},"content":{"rendered":"
LONDON (Reuters) – British manufacturers suffered a double hit last month as COVID-19 disruption to global shipping combined with new trade barriers with the European Union, according to a survey published on Monday.<\/p> Separate data from the Bank of England showed a record fall in borrowing by consumers in December, potentially paving the way for a spending rebound once the pandemic eases.<\/p>\n But for now the data paints a picture of a British economy that is struggling in early 2021 as finance minister Rishi Sunak considers whether to extend his emergency support programmes.<\/p>\n Data firm IHS Markit said its monthly survey of the factory sector showed a hit to new export orders, signs of supply chain problems and inflation pressure.<\/p>\n Fhaheen Khan, an economist at Make UK, a manufacturing lobby group, said the worst of the supply chain challenges were yet to come as many manufacturers were still working down stockpiles.<\/p>\n \u201cThe impact of both COVID-19 and leaving the EU could linger for many years to come,\u201d he said.<\/p>\n The final IHS Markit\/CIPS manufacturing Purchasing Managers\u2019 Index fell to 54.1, below the level in the euro zone and down from a three-year high of 57.5 in December, when factories rushed to beat problems when Britain\u2019s new trade relationship with the EU began on Jan. 1.<\/p>\n Smaller manufacturers were the hardest hit.<\/p>\n Britain\u2019s fast COVID-19 vaccination programme and progress by companies in adapting to Brexit held out the prospect of a pick-up in the pace of growth but there was no swift end to the headwinds in sight, Rob Dobson, director at IHS Markit, said.<\/p>\n Input price inflation rose to a four-year high, reflecting raw material shortages and transport delays, leading to the steepest inflation of selling prices for 28 months.<\/p>\n Monday\u2019s data from the BoE showed unsecured lending to consumers was 7.5% lower in December than a year earlier, the biggest decline since monthly records began in 1994.<\/p>\n \u201cWith households paying down debt now, they should be in a good position to start spending again once the COVID-19 restrictions are eventually lifted,\u201d Ruth Gregory, an economist with Capital Economics, said.<\/p>\n But Samuel Tombs at Pantheon Macroeconomics said many households were likely to buy foreign holidays and imported items such as new cars which would not boost economic output.<\/p>\n The BoE data also showed mortgage approvals slipped back slightly in December but remained close to a 13 year-high.<\/p>\n Tombs said the housing market rebound would lose steam before the scheduled March 31 expiry of Sunak\u2019s tax cut for property purchases.<\/p>\n