The UK S&P Global Manufacturing PMI for February was 52, above the 51.8 forecast.
A reading above 50 means manufacturing is expanding. So, February’s result signals growth in the sector.
Uk Manufacturing Momentum Strengthens
February’s PMI print of 52 beat expectations (51.8) and marks a second straight month of expansion. This strength suggests the weakness seen in the final quarter of 2025 may be fading. Overall, UK economic momentum looks firmer than many expected.
This surprise could also affect the Bank of England’s rate path. With January 2026 inflation data showing core CPI still at 2.9%—well above the 2% target—stronger growth reduces the odds of near-term rate cuts. Markets are now pushing back expectations for the first cut from late Q2 to Q3 2026.
For equity traders, this supports a preference for the more UK-focused FTSE 250 over the globally exposed FTSE 100. During a similar stretch of domestic outperformance in mid-2025, the FTSE 250 rose by more than 3% versus the FTSE 100 over the following month. One way to position for a repeat move is buying call options on FTSE 250 ETFs.
In FX, the data adds to sterling’s recent strength, especially versus the US dollar. Last week’s US retail sales report missed expectations, widening the policy gap in a way that favours the pound. Buying GBP/USD call options with expirations in the coming weeks is one way to express this view.
In rates, the data suggests UK government bond yields can move higher as markets price in a more hawkish BoE. The UK 2-year gilt yield, which is very sensitive to policy expectations, has already risen to 4.55% this morning. Further upside pressure is possible, and traders could position for it by selling short-sterling or gilt futures.
Rates Markets Reprice Boe Outlook
Create your live VT Markets account and start trading now.
here to set up a live account on VT Markets now
