Friday 6 April
Britain’s alcohol producers can join UK manufacturers in raising a glass to additional demand for their products and good news for the UK economy as a whole. Yet another survey has recorded reduced in inflation while manufacturing output increases to the extent a huge expansion investment is now imminent. Vauxhall is upping output from its Luton factory and Barclays is telling everyone to relax about Brexit and look forward to the longer term prospects of independence.
IHS Markit’s monthly Purchasing Managers Index has posted yet another increase, up from 55 in February to 55.1 in March – any score above 50 signifies growth in UK manufacturing. The results outpace economists’ forecasts, who had tried to price in disruption caused by the “Beast from the East” storm that struck last month. IHS Markit also recorded an increase in employment with companies on aggregate reporting a “strongly positive outlook”.
Britain’s factories will soon have to invest in additional capacity as they push their current output to the absolute maximum, says a Bank of England report. Across its 12 regional offices, the BoE conducted a survey with more than 700 manufacturers and discovered a widespread hold on expansion, which will soon need to be corrected with additional investment on a large scale. The researchers also found evidence consumers are increasingly switching to British-made goods thanks to the relatively higher cost of imports brought about by Sterling’s devaluation. A separate report by the bank’s network of agents, for which 2,500 executives were interviewed, found that less than 40% of them devote any time adapting to Brexit in a given week, with an additional 15% saying they spend less than five hours.
Barclays boss, Jes Stanley claims any negative effects on the economy caused by Brexit will be minor compared to the long-term gains, adding:
“Not only does the UK have to keep an eye on what’s going on in Brussels and how to negotiate Brexit with the European Union, we also need to keep an eye on the very dynamic and changing situation in the US.”
Stanley also said he was optimistic London and Washington would strike a trade deal.
Following on from the announcement covered in the last edition of a drop in inflation, the British Retail Consortium has further defied Remainers’ hyperinflationary warnings, revealing a 1% drop in prices in the year to March. “Shop prices have been deflationary for 59 months now, and this is the deepest deflation since February 2017,” said a BRC spokesperson.
Vauxhall, now under the ownership of Peugeot will increase production at its Luton factory where the new Vivaro van will be assembled for the British and European markets. Peugeot will invest more than £100m at Luton, creating 350-450 new jobs, capacity will increase from 60,000 vehicles a year to 100,000. The plant’s future is now guaranteed for a further 10-12 years.
Whether it’s Whiskey, beer or gin, foreign consumers are buying it from Britain. The UK’s alcoholic beverages sector recorded an impressive 12% increase in exports over the year to November 2018. Sales, both domestic and overseas increased 16%. Less than a third surveyed are concerned about the impact of Brexit.