U.K. manufacturing PMI falls to 51.9 in December

Manufacturing activity in the U.K. expanded at the slowest rate in three months in December, dampening optimism over the country’s economic outlook and dimming the case for higher interest rates, industry data showed on Monday.In a report, market research group Markit said that its U.K. manufacturing PMI fell to a seasonally adjusted 51.9 last month from a revised reading of 52.5 in November. Analysts had expected the index to inch up to 52.7 in December.On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.The consumer goods sector remained the prime driver of production and new order growth, despite seeing its rates of expansion ease over the month. Similar decelerations were also seen at intermediate and investment goods producers.Commenting on the report, Rob Dobson, senior economist at survey compiler Markit, said, “This suggests that industry will make, at best, only a marginal positive contribution to broader economic growth in the final quarter of the year."GBP/USD was trading at 1.4765 from around 1.4779 ahead of the release of the data, while EUR/GBP was at 0.7394 from 0.7387 earlier.Meanwhile, European stock markets were down sharply. London’s FTSE 100 dropped 1.75%, the EURO STOXX 50 declined 2.95%, France's CAC 40 slumped 2.6%, while Germany's DAX sank 3.2%.