United
Kingdom industrial production rose less than economists forecast in
June and the output estimate for the second quarter was revised lower, Bloomberg reports.
Production increased 0.3 per cent from May, when it fell 0.6 per cent, the Office for National Statistics said in London today.
The median forecast of 32 economists in a Bloomberg News
survey was for an increase of 0.6 per cent. Output in the second
quarter rose 0.3 per cent, below the 0.4 per cent estimate published in
last month’s gross domestic product data.
The report adds to signs that parts of
the recovery are softening, with manufacturers battling a stronger pound
and strains in the euro area, Britain’s biggest trading partner.
“The last couple of months do hint at
some cooling off in the near-term momentum,” said Alan Clarke, an
economist at Scotiabank in London. “Euro-zone demand for our exports is
still sluggish to it is hard to get too upbeat from here.”
The pound extended its decline against
the dollar after the data were published and was 0.3 per cent weaker at
$1.6842 at 10:11 a.m.
London time. Sterling has risen 11 per
cent in the past 12 months, making it the best performer in a basket of
10 developed-nation currencies tracked by Bloomberg.
Bank of England officials start their
two-day policy meeting today as they assess the economy’s ability to
withstand higher interest rates. While all 47 economists in a Bloomberg News
survey say the Monetary Policy Committee will leave the key rate at a
record-low 0.5 per cent, some forecasters predict an increase will come
as soon as November.
“It is clearly a very close call as to
whether the Bank of England will raise interest rates at the end of this
year or hold off until early 2015,” said Howard Archer, an economist at
IHS Global Insight in London.
The statistics office said the revision
to second-quarter production will have a “minimal” impact on the GDP
estimate published on July 25. That showed the economy grew 0.8 per
cent.
Within production, mining and quarrying
dropped one per cent in June from the previous month, while oil and gas
extraction fell 1.3 percent.
Today’s report also showed that
manufacturing output rose 0.3 per cent in June from May, half the
increase forecast by economists. From a year earlier, factory output
increased 1.9 per cent, with total production up 1.2 per cent.
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