The Bank of England is expected to lower interest rates this week in the midst of deepening of darkness over the British economy.
British factories reported another difficult month in January as output, new orders and employment.
The S&P Global UK Manufacturing PMI survey, closely monitored by economists, registered a lecture of 48.3 last month, from 47 in December.
Each lecture above 50 indicates that the activity is growing, while every score below means that it contract.
Companies pointed to increasing input costs in combination with tax increases, announced by Chancellor Rachel Reeves at the budget of October, as an extra pressure that they are dealing with.
Policy makers in Threadneedle Street have been warned that they are confronted with a 'real dilemma' when they meet on Thursday to decide what they are doing about interest rates.
They will have to weigh the need for speed reductions to support flag growth against the prospect of a new increase in inflation.
Those fears were exacerbated by US President Donald Trump, who caused a worldwide trade war by imposing rates on Canada, Mexico and China.
This week, the Bank of England is expected to lower interest rates in the midst of deepening the gloom about the British economy
The S&P Global UK Manufacturing PMI survey, closely viewed by economists, registered a lecture of 48.3 last month, from 47 in December
Mr. Trump gave a warning that the 'horrible' EU could be the following in line for trading taxes.
But although he also suggested that Great Britain is 'out of the line', the US president gave some hope to Prime Minister Sir Keir Starmer when he added that the problems could be 'elaborated'.
Markets bet that the Monetary Policy Committee (MPC) of the bank will lower interest rates on Thursday to 4.5 percent.
This would be the third reduction compared to the costs of borrowing in just over half a year.
In December the MPC decided to keep the interest rates at 4.75 percent after figures showed that inflation rose in November for the second month in a row.
Rob Dobson, director at S&P Global Market Intelligence, said: 'The beginning of 2025 went through the recession in the British production sector.
'Factory output, new orders and employment all fell further in January, because companies were confronted with a weak market demand, rising costs and a deteriorating outlook.
'The newest survey also suggests that this cut is felt the most difficult at small companies.
'Large manufacturers did better and saw output and new orders recover in January.
'Nevertheless, there seems to be little room for some approaching improvement in performance across the board.
'The demand conditions remain weak in both domestic and overseas markets, the cost pressure will rise and will probably continue to do so, since changes to the minimum wage and the national insurance of the employer announced in last year's budget food.
'Business Optimism therefore remains near the two -year layer of December, while the inflation of the input price has been enriched into a high of two years.
“A stagnant economy and rising cost burden leave policy makers a real dilemma, which balances the need for speed reductions to support flag growth and a falling labor market against the need to contain inflationary pressure.”
