Key insights
- UK manufacturing confidence hit a COVID-era low due to the Iran war and rising inflation expectations, signaling potential global supply chain disruptions and cost pressures. While primarily a UK issue, increased global uncertainty and inflationary pressures could indirectly impact US equities by affecting multinational corporations and potentially influencing Federal Reserve policy.
Investing.com -- British manufacturers have recorded their weakest sentiment since the start of the COVID-19 pandemic, driven by the Iran war and surging inflation expectations, a survey published Thursday showed.
The Confederation of British Industry reported that firms’ investment plans for buildings, plant and machinery and training reached their lowest levels since April 2020.
Ben Jones, the CBI’s senior lead economist, said warning signs are flashing in the survey. He noted the war in the Middle East is contributing to rising uncertainty, with supply chains beginning to see renewed strain and cost pressures intensifying.
The survey’s quarterly measure of optimism about the business outlook fell to -65 in April from -19 in January.
The CBI’s monthly order book balance dropped to -38 from -27 in March, falling further below its long-run average of -14.
The survey’s gauge of expected prices jumped to +32 from +12 in March, marking the largest month-to-month increase since records began in 1975.
The survey collected responses from 276 manufacturers between March 25 and April 13.
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