British industrial output was flat in July and there was a marked deterioration in the trade balance, official data showed today, taking some of the shine off recent strong economic data.
Output in the industrial sector - which makes up about one sixth of Britain’s economy - had been expected to edge up by 0.1 per cent according to a Reuters poll.
The narrower category of manufacturing rose by 0.2 per cent, just short of forecasts for a 0.3 per cent rise, although June’s figure was revised up, the Office for National Statistics said.
Signs of a surprisingly strong recovery in Britain’s economy have come thick and fast in the past few months. Britain’s economy grew 0.9 per cent in the three months to August, its fastest rate in more than three years, the National Institute of Economic and Social Research said today. That compared with growth of 0.7 per cent in the three months to July.
NIESR’s latest growth estimate was the highest since the three months ending July 2010, although it warned that that rate of growth would likely soften. “The external environment in the guise of weak demand from the euro area and slowing emerging markets will likely limit the rate of the UK’s economic expansion,” said NIESR.
The Bank of England pledged last month to keep interest rates on hold until unemployment falls to 7 percent, something it does not envisage happening for another three years, but the strength of recent data has encouraged traders to bet rates might rise as soon as next year.
Separate figures showed Britain’s goods trade deficit widened to £9.85 billion in July after narrowing sharply in June. Economists had forecast a gap of £8.153 billion.
Including services, in which Britain traditionally runs a surplus, the trade deficit widened to £3.085 billion. That was more than double its level in June and the worst reading since October 2012.
Exports to non-European Union countries plunged by nearly 16 per cent, the biggest monthly fall since January 2009.
Monthly trade figures are volatile but July’s figures may dampen hopes that Britain’s economic recovery is broadening and moving onto a more sustainable footing.(Reuters)
