Manufacturing activity levels in October
PMIs for all UK sectors are to be released this week. While we will keep a close eye on the full set of indices, we expect no major swing in October.
In particular, manufacturing PMI continued to recover in September after large ups and downs in the wake of the Brexit vote. The index is likely to improve slightly in October, helped by a rise in manufacturing activity internationally - the US and Euro area PMIs printed at 53.2 and 53.3 respectively in October up from 51.5 and 52.6. Moreover, the further depreciation in Sterling over the previous month is likely to provide a boost to export orders, but its effect should be partly offset by the on-going pressure on input costs and prices.
Bank of England's Super Thursday
The Bank of England's MPC meeting will take place on Thursday. Last week, GDP came in at 0.5% in the third quarter of this year, well above market expectations. As the economy showed resilience post-referendum, we don't expect any change in the Bank Rate this time. However, further action remains likely next year as the economy slows down.