U.K. industrial production rose the most since September as oil and gas extraction surged and manufacturing increased for a second month.
Output gained 0.5 percent in March from the previous month, the Office for National Statistics said in London on Tuesday. Economists had forecast no change, based on a Bloomberg survey. In the first quarter, industrial output was revised to a 0.1 percent increase from a 0.1 percent decline, though the ONS said the impact on GDP would be “minimal.”
“The industrial sector may have turned the corner, no doubt helped by the lower oil price,” said Vicky Redwood, an economist at Capital Economics in London. “We remain hopeful that we should see at least a little rebalancing of the economy this year.”
The data come a day before Bank of England Governor Mark Carney will publish new forecasts for growth and inflation. While U.K. economic growth slowed to 0.3 percent in the first quarter, Markit Economics said its industry surveys point to a pickup since then, led by services.
The pound erased its decline against the dollar after the data and was up 0.5 percent at $1.5656 as of 10:15 a.m. London time. It weakened against the euro, to 71.87 pence. It’s risen about 12 percent against the single currency in the past year.
Manufacturing rose 0.4 percent in March from February, the ONS said, exceeding the 0.3 percent estimate in a Bloomberg survey. Oil and gas extraction surged 4.9 percent, the most since February 2014. Within manufacturing, the monthly increase was led by pharmaceuticals and a broad category that includes furniture and the repair of ships and aircraft.
From a year earlier, industrial output rose 0.7 percent and manufacturing production increased 1.1 percent, both more than economists had forecast.
Carney’s press conference in London will be his first public comments since the surprise May 7 general election result that gave Conservative Prime Minister David Cameron a majority in Parliament. He’ll discuss the outlook for monetary policy and the risks to growth as activity in Europe, Britain’s biggest trading partner, shows signs of recovery.
“On the export front, manufacturers will hopefully benefit from improving growth in the euro zone,” said Howard Archer, an economist at IHS Global Insight. “However, the strength of the pound against the euro threatens to continue to dilute the upside for U.K. manufacturing exports.”