The purchasing manager index of activity in the UK manufacturing sector rose to 50.1 in August from an upwardly revised 49.5 in July, the Chartered Institute of Purchasing and Supply said. This was higher than expected. The consensus forecast of economists polled by AFX News was for the PMI to rise to 49.4 from the initial July reading of 49.2. A reading above 50 indicates an expansion in activity, while a sub-50 figure indicates contraction. The components of the release were generally upbeat with gains seen in output and new orders. Export orders were flat though and the employment component fell to its lowest level since May 2003. "Psychologically, the headlines move back above 50 into expansion territory should be a boost, but given other manufacturing sectors paint a far weaker picture, the extent of recovery must be questionable," said Daragh Maher, senior FX strategist at CALYON. "There is nothing here though that will dissuade the Bank of England or the market that the most appropriate strategy for now is to leave rates unchanged," he added.