LONDON: Britain's manufacturers reported further growth in February and, despite a slight slowdown, the sector's recovery is reducing the need for more stimulus from the central bank as the economy is slowly moving out of the danger zone.
Some Bank of England policymakers, including Governor Mervyn King, this week played down the likelihood of another cash boost, and news that the sluggish housing market is gaining a touch of momentum bolstered views that February's 50 billion pound ($80 billion) cash injection may have been the last.
The Markit/CIPS Manufacturing Purchasing Managers' Index (PMI) ticked down to 51.2 from a slightly downwardly revised 52.0 in January, which was the highest level since May, data compiler Markit said on Thursday.
The reading fell short of analysts' forecasts for 51.8 but was still above the 50 mark which separates expansion from contraction.
Manufacturers now seem on course to help the economy grow after a 0.8 percent drop in the sector's output led to a small overall contraction in the economy.
"It suggests to me that the round of QE expiring in May was the last one," said Alan Clarke of Scotia Capital. "QE is an emergency measure and we are not in an emergency anymore."
On Wednesday, BoE policymaker Martin Weale said he did not think there would be a case for more quantitative easing once current purchases are complete, and King said that markets did not have strong expectations for further stimulus.
However, policymaker David Miles, who voted for a higher dose of quantitative easing in February than the majority, said that a bigger boost now would help the economy get back on track faster and allow a quicker normalisation of ultra-low interest rates.
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