Closing summary
The Bank of England governor, Andrew Bailey, has signalled interest rates may have peaked after 10 successive increases in the official cost of borrowing since December 2021.
Speaking in London, Bailey said Threadneedle Street would assess the impact of tighter policy on the economy before sanctioning any fresh moves.
Annual house price growth in the UK turned negative in February for the first time in almost three years, Nationwide data shows, falling to its lowest level since November 2012.
UK mortgage approvals and lending fell in January, further evidence of the housing slowdown, while consumer credit doubled to £1.6bn, as people borrowed more on credit cards (£1.1bn) amid the cost of living crisis, according to Bank of England figures.
In China, the manufacturing sector expanded at its fastest pace in more than a decade in February, as demand recovered after Beijing eased its strict zero Covid policy. The solid PMI readings suggest that the government will set a high GDP growth target, analysts said.
Thank you for reading. We’ll be back tomorrow. Take care, JK
US manufacturing in decline – PMIs
The US manufacturing PMI from the Institute for Supply Management (ISM) has come in a bit weaker than expected.
The main index was 47.7 in February, slightly up from 47.4 in January but worse than the 47.9 expected by analysts. Any reading below 50 indicates contraction; any reading above points to expansion.
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— Matt Weller CFA, CMT (@MWellerFX) March 1, 2023
US ISM Manufacturing PMI prints at 47.7 vs. 47.9 expected.
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The other PMI survey from S&P Global also pointed to a decline in manufacturing, with that index posting 47.3 in February, up slightly from 46.9 in January, but blow the flash estimate of 47.8%.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said:
US manufacturing remained under intense pressure in February. Although the PMI rose slightly, it continues to signal the steepest downturn outside of pandemic lockdown months since 2009.
Moreover, some of the improvement in output could merely be attributed to faster supplier delivery times, which quickened to the greatest extent since 2009 to facilitate higher production and enable factories to work through previously placed orders. The worry is that new order inflows continue to fall sharply as many companies report disappointing sales, linked in part to a sustained trend towards cost-saving inventory reduction and low levels of confidence at their customers, both at home and abroad. None of this points to a healthy economic situation.
There was some brighter news in that factory jobs growth picked up slightly amid reports of greater success in filling vacancies, and the improvement in supply chains helped reduce input cost inflation. However, rising wage pressures and efforts to raise margins meant average prices for goods leaving the factory gate rose sharply once again, the rate of inflation accelerating for a second straight month to hint at stubbornly high price pressures.
