The pound dropped against the dollar and the euro on Tuesday morning after disappointing economic data on the manufacturing sector.
The latest Purchasing Managers’ Index survey came in at 53.9 for April, a 17-month low. Any reading above 50 signals expansion, but this was down from 55.1 in March and below predictions of 54.8.
Following disappointing economic growth in the first quarter , which economists said was caused mainly by the Beast from the East , the market was hoping for a positive sign from the manufacturing sector, which failed to materialise.
Sterling fell more than 0.6 per cent against the dollar to $1.367, and dropped 0.3 per cent against the euro to €1.136, after the manufacturing data was published.
Meanwhile, Bank of England figures also indicated consumer sentiment is weakening, with a drop in the number of mortgage approvals for house purchase in March and a sharp slowdown in the rate of credit card borrowing.
