James Smith, Economist at ING, suggests that heightened concerns about global growth continues to weigh on UK manufacturers, although it is possible that uncertainty surrounding the EU referendum is starting to hurt confidence. Key Quotes “The UK Markit/CIPS Manufacturing PMI delivered a small improvement on February’s reading (51.0 vs 50.8), although came in below the consensus expectation of 51.2. Following last month’s disappointing reading, it seems that financial market volatility and heightened concerns about global growth are continuing to weigh on business confidence, outweighing any boost from the weaker pound. The third consecutive decline in the new export business component adds some weight to this idea. But it is also possible that uncertainty surrounding the outcome of the forthcoming EU referendum is filtering through to business confidence. It is possible that, in advance of the vote, businesses temporarily delay hiring/investment plans until the result becomes clearer. A poor services PMI reading next Tuesday would give further weight to this theory, and we think that there is scope for another sub-consensus reading. Given that the service sector makes up around 80% of the economy, any disappointment could suggest that growth momentum is slowing to some degree as we head into the second quarter.” For more information, read our latest forex news.