(MENAFN- FxPro) Manufacturing activity in the U.K. expanded at a slower rate than expected in May, fuelling concerns over the country's economic outlook, industry data showed on Monday.
In a report, market research group Markit said that its U.K. manufacturing PMI inched up to a seasonally adjusted 52.0 last month from a reading of 51.8 in April. Analysts had expected the index to rise to 52.5 in May.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
The manufacturing sector saw further modest expansions of both output and new orders in May, as a solid domestic market continued to offset lackluster demand from overseas.
Commenting on the report, Rob Dobson, senior economist at survey compiler Markit, said, "Manufacturing looks on course to act as a minor drag on the economy, as the sector is hit by a combination of the strong pound and weak business investment spending."
GBP/USD was trading at 1.5241 from around 1.5270 ahead of the release of the data, while EUR/GBP was at 0.7156 from 0.7152 earlier.
Meanwhile, European stock markets held on to gains. London's FTSE 100 tacked on 0.1%, the EURO STOXX 50 rose 0.4%, France's CAC 40 advanced 0.55%, while Germany's DAX inched up 0.2%.
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