U.K. Manufacturing Unexpectedly Drops Most in Eight MonthsBy
Total production falls, led by oil and gas extraction
Oil output affected by Buzzard field shutdown in North Sea
U.K. manufacturing output unexpectedly fell the most in eight months in October as pharmaceuticals slumped.
The 0.9 percent drop compared with forecasts for a 0.2 percent increase and marked the biggest decline since February. Industrial production fell 1.3 percent, driven by a slide in oil and gas extraction. That was due to a shutdown of Buzzard, one of the U.K.’s biggest fields, the Office for National Statistics said on Wednesday.
From a year earlier, manufacturing fell 0.4 percent and total production declined 1.1 percent. The annual drop in overall output was the biggest since August 2013. The pound extended its drop after the data, and was down 0.7% at $1.2592 as of 9:40 a.m. London time.
The ONS also revised production for the third quarter to show a 0.4 percent decline compared with 0.5 percent previously. The change has no impact on overall gross domestic product for the period, when the economy grew 0.5 percent.
The strength of the economy in recent months has surprised some forecasters who predicted a downturn in the wake of Britain’s June vote to leave the European Union. Growth has been significantly driven by consumers.
IHS Markit said this month that manufacturing cooled in November. Still, the survey, along with construction and services, indicate the U.K. economy could grow 0.5 percent again this quarter.
Pharmaceutical products, which can be erratic, fell 3.6 percent in October from the previous month.
— With assistance by Mark Evans