LONDON: Sterling fell against the dollar and euro on Monday after mixed data that showed British manufacturing grew slightly more than expected in January but that factories had cut prices as the cost of oil plunged.
A monthly index of sentiment among manufacturing purchasing managers (PMI) rose to 53.0 from 52.7 in December, boosted by export orders. That was comfortably above the 50 level that signals growth and beat a consensus forecast of 52.6.
The figures suggest manufacturing output is rising at a quarterly pace of around 0.2 percent, according to survey compiler Markit, only a slight improvement on the 0.1 percent growth seen in the last three months of 2014.
With oil prices more than halving over the last six months to below $50 a barrel, prices paid by manufacturers for raw goods fell at the fastest rate since May 2009. That spurred producers to cut their prices for the first time in 19 months and at the fastest pace since September 2009.
Sterling initially rose after the data before falling to $1.5025, down 0.3 percent on the day and close to an 18-month low of $1.4952 hit in January.
The pound was down 0.8 percent against the euro, which was higher across the board, at 75.55 pence.
"There's just too many factors such as disinflation, slowing domestic growth and constantly delayed interest rate expectations pushing away investor attraction to the pound," said Jameel Ahmad, chief market analyst at FXTM.
Sterling has fallen around 11 percent in the past six months as investors have pushed back their bets on when the BoE will raise rates well into next year.
Bank of England Chief Economist Andrew Haldane last week reiterated the message that the Bank was in no rush to raise interest rates and that when hikes do come, they will be gradual, perhaps just a half percentage point rise each year.
Investors will be looking closely at next week's quarterly BoE Inflation Report, for any clues as to when the BoE's monetary policy committee (MPC) might start raising rates.
"The MPC may want to signal that markets have pushed the timing of the first UK rate hike too far into the future," wrote Citi analysts in a research note on Monday.
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