British manufacturing output gets boost from 'hard Brexit' concerns

British manufacturing output hit a six-month high in December as companies' stockpiling in preparation for possible border disruptions caused by Brexit gathers pace, data showed Wednesday. The IHS Markit/CIPS UK manufacturing purchasing managers' index climbed to 54.2 last month, up from 53.6 in November. A PMI figure above 50 indicates growth, while economists' consensus was for a drop to 52.5. "Manufacturers linked increases in both domestic and overseas demand to clients purchasing to build up safety stocks to mitigate potential Brexit disruption," IHS said.

The UK government and Brussels have struck a withdrawal agreement that would prevent a no-deal Brexit. However, it currently lacks majority support in the British parliament, being opposed by Brexiteer lawmakers and pro-EU MPs ahead of Britain's planned exit on March 29. Wednesday's data "is the first real sign that stockbuilding is taking place as a precaution to mitigate the disruption that a no deal Brexit would cause", noted Andrew Wishart, an economist at research group Capital Economics. "As a result, manufacturing output should increase in the coming months."