U.K. October Industrial Production Rises for a Second MonthEmma Charlton
U.K. industrial production rose for a second month in October, a sign that the economic recovery maintained momentum at the start of the fourth quarter.
Output increased 0.4 percent from September, when it rose 0.9 percent, the Office for National Statistics said today in London. That matched the median forecast of 30 economists in a Bloomberg News survey. Factory production also increased 0.4 percent, while oil and gas extraction dropped 2.5 percent.
Bank of England Governor Mark Carney said yesterday that news on the U.K. economy has been “positive” after growth accelerated to 0.8 percent in the third quarter, helped by a strengthening housing market. Markit Economics said last week that its indexes of services, manufacturing and construction point to expansion of about 1 percent this quarter.
“For those worried that the U.K.’s recovery is an unsustainable property-price and debt-fueled boom, today’s data present a more upbeat assessment,” said Rob Carnell, chief international economist at ING Bank NV in London. “This will provide a robust starting point for the fourth quarter.”
From a year earlier, industrial output rose 3.2 percent, the biggest annual gain since January 2011, today’s report showed. Manufacturing increased 2.7 percent from a year ago.
The pound was little changed at $1.6435 as of 10:30 a.m. London time. It’s risen 5.6 percent in the past six months and earlier today climbed to $1.6466, the highest since August 2011.
Mining and quarrying slipped 1.1 percent in October from September, while electricity and gas rose 0.9 percent, the ONS said. The drop in oil and gas extraction on the month was related to issues at a North Sea terminal and a gas pipeline.
Within manufacturing, the monthly increase was led by transport equipment, machinery and equipment as well as rubber and plastics. Of the 13 manufacturing categories, seven rose in October and six declined.
A separate report showed exports fell 1.3 percent in October from the previous month, while imports dropped 1.9 percent. The goods trade gap narrowed to 9.73 billion pounds ($16 billion) from 10.1 billion pounds the previous month.
The surplus on services was 7.11 billion pounds in October, leaving a total trade gap of 2.62 billion pounds.
Exports to the European Union plunged 3.8 percent on the month, pushing the deficit with the bloc to 6.5 billion pounds. That’s the highest since the data series began in 1998.
The production and trade data point to continued economic growth “but they also highlight the economic challenges that still remain,” said British Chambers of Commerce Chief Economist David Kern. “Problems in the euro zone remain a major challenge for our exporters.”
Carney said in a speech in New York yesterday that while the U.K. economic outlook is improving, sustained growth “will require a more robust and balanced global recovery.”
“A recovery may be gaining pace but our economies are a long way from normal,” he said. “Leverage is still high and weak demand for advanced-economy exports could persist for some time.”