imageEconomic Indicators12 hours ago (Mar 03, 2020 02:12AM ET)

(C) Reuters. Coronavirus Is Disrupting British Factories’ Supply Chains

(Bloomberg) —

The coronavirus outbreak is starting to feed through to British factory supply chains, casting doubt on whether an upswing in activity after Boris Johnson’s election will continue.

IHS Markit said Monday that U.K. manufacturing grew slightly less in February than it first estimated. The index for output slipped to 51.7 from the initial 51.9 reading. The pound traded down 0.4% at $1.2766 as of 9:33 a.m.

The report showed that the outbreak led to material delivery delays, rising input costs and increased pressure on stocks of purchases. Overseas demand decreased for a fourth month.

The figures come as Bank of England promised to “ensure all necessary steps are taken to protect financial and monetary stability.” Governor Mark Carney on Friday warned that the spread of the disease was already impacting the U.K. economy, disrupting companies’ operations and reducing tourism.

“The U.K. manufacturing sector remained in recovery mode,” said Rob Dobson, director at IHS Markit. “With supply-chain headwinds rising, and trade negotiations with the EU starting, it remains to be seen whether the recovery can stay on course during the coming months.”

Some companies surveyed also reported efforts to re-route supply chains away from the U.K. following Brexit, contributing to weaker demand from the European Union, Markit said.

Still, output rose at the fastest pace in ten months, according to the report.

Separately, the BOE on Monday said that mortgage approvals rose to the highest since since February 2016.

(Updates with market reaction from second paragraph)

Coronavirus Is Disrupting British Factories’ Supply Chains

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.