U.K. investors received an unexpectedly strong reading for manufacturing activity in August, boosting the view that the British economy has fared better than anticipated after the U.K. voted in June to leave the European Union.

The IHS Markit/CIPS purchasing managers index jumped to a 10-month high in August, to 53.3. Analysts had expected the PMI to climb to 49.6. In July, that reading logged a 41-month low of 48.3.

“Companies reported that work that had been postponed during July had now been restarted, as manufacturers and their clients started to regain a sense of returning to business as usual,” said Rob Dobson, senior economist at IHS Markit, in a statement.

The pound GBPUSD, -0.70% surged immediately after the data, rising more than 1 cent, or nearly 1%, to trade above $1.32 against the U.S. dollar. Sterling also shot nearly 1% higher against the GBPEUR, -0.34% . Meanwhile, the yield on 10-year U.K. gilts TMBMKGB-10Y, 0.156% scaled up 6 basis points to 0.597% as prices fell.

Here’s what analysts are saying:

“It would appear that the early impact of Brexit is a win-win for U.K. manufacturers. Not only is it still too early in the process for domestic consumers to be feeling the potential pain of Brexit – in fact demand increased, possibly aided by spending abroad suddenly being that much more expensive – but the sharp depreciation of the pound has spurred demand from abroad for U.K. manufactured goods. While this is great news, it’s still very early in the process and much of the pain caused by Brexit will likely come later on. That said, it is encouraging that the drop in the pound is immediately supporting U.K. exporters, which will help cushion the blow.” — Craig Erlam, senior market analyst at Oanda

“Although the U.K. economy has undoubtedly been affected by the Brexit vote, the damage done seems far away from some of the apocalyptic predictions we heard before the referendum. Should Monday’s services PMI beat expectations and show expansion, we will see the chances of another interest rate cut by the Bank of England recede, with further sterling gains likely.” — Jake Trask, currency analyst at UKForex

“Does it mean the referendum vote hasn’t damaged the U.K. economy? No. First, manufacturing is only around 10% of the economy; we will need to wait for the services PMI release on Monday to have a better idea of the near-term impact of the UK vote to leave the EU on whole economy activity. The manufacturing sector appears to be doing relatively well compared to the more domestically-orientated services sector, in large part because the depreciation of sterling is expected to provide support to exports. Second, there is likely to be some volatility in the PMIs in the months following the referendum.” – Daniel Vernazza, lead U.K. economist at UniCredit Research

Markit/CIPS

“As of now [the] U.K. is enjoying the best of both worlds as it remains in the European Union while the manufacturing sector benefits from sharply lower exchange rates. It’s doubtful this state of ‘uncertain bliss’ will be allowed to remain much longer. The Germans, who ironically enough are suffering the most from Brexit so far, are unlikely to tolerate this state of affairs for much longer and as for the U.K. government of [Prime Minister Theresa] May, the attitude appears to be to proceed with the Brexit despite the opposition of the business sector. Ms. May ruled out the possibility of a Parliamentary vote on Brexit, thus eliminating one of the surest ways to delay the plan.” — Boris Schlossberg, managing director of FX strategy at BK Asset Management