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UK’s production growth is the lowest in a year in January-March

UK’s production growth slowed to the lowest level in a year this quarter, as a survey made public today showed, which means that the economy is sluggish but firm in its direction one year before Brexit.

The IHS Markit/CIPS UK PMI slightly rose to 55.1 last month, from February’s revised down 55.0, overtaking the average of 54.5 forecasted by analysts in a Reuters poll.

January’s figure was revised downwards as well, just as the whole first quarter, with the PMI showing factory production growth of 0.4% - 0.5% in January-March period, dropping from 1.3% of the last quarter of 2017.

Production holds 10% of UK’s economy, and at the end of last year it demonstrated rather brisk performance, whereas the economy in general had the worst reading out of G-7 countries.

The deceleration was largely the result of lower consumer demand, which derived from rising inflation in the wake of Brexit referendum in 2016. Last week’s PMI report indicated that expansion in producers of euro zone fell to the minimum in 8 months in March, but still UK was behind them.

The PMI’s new business index plunged to the lowest in 9 months in March, as export orders growth slumped, which might be a response to the latest rise of pound.

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