Manufacturing recovery pace slowed last month, says survey

Data from the closely watched CIPS/Markit purchasing managers’ index survey for July gave a weaker-than-expected reading of 55.4, down from 57.2 a month earlier - but still well above the 50 threshold indicating growth.

Economists said they were not overly worried by the figure, which comes on the back of one of the sector’s best quarters in two decades.

However, it does raise fears that businesses are starting to feel the impact of sterling’s strength, as well as jitters over looming interest rate rises and a drag on some European export markets due to the crisis in Ukraine.

The Bank of England’s monetary policy committee is due to vote on interest rates next week, with most experts predicting no change from 0.5 per cent.

Markit senior economist Rob Dobson said: “Policymakers were expecting growth to slow slightly from the impressive rate seen in the first half of the year, in part due to expectations of higher borrowing costs next year.”