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Pound up after worst month in the last 10

Britain’s factories grew a lot more strongly than expected in August as work flowed in from home and abroad, a survey showed this morning, suggesting the economy might be picking up speed after a slow first half of 2017.

The Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) jumped to 56.9 from 55.3 in July, higher than any forecasts in a poll of economists.

Manufacturing accounts for only around 10 percent of the British economy.

That could “add fuel to hawkish (Bank of England) policymakers’ calls for higher interest rates. The BoE’s rate-setters voted 6-2 against a rate hike in August with most policymakers expressing concern about the impact of last year’s Brexit vote on the economy.

Growth in exports eased off only slightly from a seven-year high in July, helped by stronger demand from key markets in Europe, the United States and elsewhere and by the fall in the value of the pound since the Brexit vote.

Later this afternoon we have the US Non Farm payroll data, which is expected to be weaker than previous so we could see Sterling gain against the dollar.

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