Manufacturing PMI data measured by the Chartered Institute of Purchasing and Supply was released today at the lowest level since 1992 with the Index registering at 34.36 in November, adding another negative data point to the crumbling UK housing market and banking sector. With industrial contraction, higher unemployment will inevitably follow (already Jaguar and Land rover have announced layoffs in UK facilities) adding political pressure on the BOE to cut rates further.
We are short the UK market via the EWU ETF. Not only do we continue to have a negative view on the current British economy structurally, we also see no catalyst for growth that could help fuel a recovery in the foreseeable future. Gordon Brown is levering up long at the wrong time.