Global Manufacturing Sector Faces Challenges as UK Contracts, China Expands

Business optimism dips in the UK, China sees stronger output and new orders, while South Korea experiences a contraction due to falling new orders.

UK manufacturing sector contracted for the 17th consecutive month, with the S&P Global/Cips manufacturing purchasing managers index (PMI) weakening to 46.2 in December.
Business optimism among UK manufacturers dipped to a 12-month low, reflecting a faltering economic outlook and higher borrowing costs.
China's factory activity expanded at a quicker pace in December due to stronger gains in output and new orders, but business confidence for 2024 remained subdued.
South Korea's factory activity contracted in December due to falling new orders, which were squeezed by weaker Chinese demand.
Financial markets are pricing in as many as six interest rate cuts from the current level of 5.25% to about 3.75% by December in the UK.