U.K. Industrial and Manufacturing Output Rise in AugustJill Ward
U.K. industrial production rose more than economists forecast in August, boosted by gas extraction and the best month for transport equipment since 2011.
Total production increased 1 percent from July, when it declined 0.3 percent, the Office for National Statistics said in London on Wednesday. An increase of 0.3 percent was expected by economists in a Bloomberg survey. Manufacturing gained 0.5 percent following a 0.7 percent drop the previous month.
The figures come the day before the Bank of England releases its latest interest-rate decision. With recent surveys suggesting slowing growth in China and emerging markets is starting to hit the order books of British companies, policy makers are expected to keep borrowing costs at a record low.
“The Bank of England is likely to take some comfort from August’s rebound in industrial production, but it will be concerned by the underlying weakness of manufacturing,” said Howard Archer, an economist at IHS Global Insight in London. “The data are unlikely to hugely change market belief that the BOE will not be raising interest rates before late-2016, although we believe a move in the first half of the year is still very likely and would not rule out a move in February.”
A manufacturing survey published by Markit last week showed British factory growth remains sluggish and prospects for the industry are poor, while a report published on Monday showed services grew at the slowest pace in more than two years in September.
In the three months through August, industrial production rose just 0.1 percent. A 0.8 percent drop in September would leave output unchanged over the third quarter, the ONS said. Manufacturing output declined 0.9 percent.
The pound was trading at $1.5288 as of 10:55 a.m. London time, up 0.4 percent from Tuesday.
Oil and gas extraction jumped 8.7 percent in August, the biggest monthly increase since February last year. The figure was boosted by seasonal-adjustment factors, as the usual August shutdowns took place to a lesser degree this year. Many happened in July instead, earlier than normal.
Similar factors bolstered vehicle production by 8.8 percent, with factories staying open in August. Overall transport equipment rose 4.6 percent, the biggest monthly gain since January 2011.
Compared with a year earlier, industrial output rose 1.9 percent in August, with manufacturing falling 0.8 percent.