Sterling boosted by manufacturing data

<p>Better than expected manufacturing data has boosted sterling.</p>

Sterling is up against the dollar on the back of the news that the pace of the contraction of the UK's manufacturing sector has slowed down.

Analysts have stated the data for the manufacturing industry – which was better than had been forecast – could be a sign the UK's economy will grow during the second quarter.

Official figures recently showed 0.3 per cent growth between January and March 2013, helping the UK to avoid slipping into a triple-dip recession.

Commenting on the release of the purchasing managers' index data, James Knightley of ING stated it offers hope the UK economy can continue to grow this year.

He told City AM: "It also makes it less likely that the Bank of England will announce another round of [quantitative easing] next week, which will be supportive of sterling."

In a recent report from Civitas – An Exchange Rate Target: Why we need one – entrepreneur and economist John Mills called for sterling to be devalued in order to boost the UK's manufacturing industry.

Learn about the sterling and forex trading at City Index.

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