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UK industrial output rises in September; trade gap narrows

Industrial output, which includes manufacturing, accounts for 14% of Britain's overall economic output


A worker inspects biscuits on the production line of Pladis' McVities factory in London Britain. Photo: Reuters
A worker inspects biscuits on the production line of Pladis' McVities factory in London Britain. Photo: Reuters

British industrial output increased in September at the fastest pace this year and the goods trade deficit improved, mostly upbeat official data showed on Friday.

Despite also showing a sharp downturn in construction, the figures as a whole are likely to hearten officials who last week voted to raise interest rates for the first time in more than 10 years.

The said the data for September did not imply any change to its preliminary estimate that Britain's grew by 0.4 per cent in the third quarter, picking up a bit of speed from earlier in 2017 but still slower than growth in the euro zone.

The ONS said industrial and manufacturing output shot up by a monthly 0.7 per cent in September, the fastest growth for each sector since December last year and above all forecasts in a Reuters poll of economists.

The consensus had pointed to a reading of 0.3 per cent for both.

Industrial output, which includes manufacturing, accounts for 14 per cent of Britain's overall economic output.

Figures for the much bigger services sector are due to be released on November 23.

For the third quarter as a whole, there was little change to estimates for industrial, manufacturing and construction output that appeared in the ONS' preliminary economic growth estimate.

A private-sector business survey last week showed British manufacturing grew robustly in October but also suffered rising inflation pressure.

Until now, the official readings of manufacturing have tended to show a weaker picture for the sector than the surveys over 2017.

Separately, the ONS said Britain's goods trade deficit with the rest of the world narrowed by much more than expected to 11.253 billion pounds in September from 12.350 billion pounds. Economists polled by Reuters had expected a reading of 12.8 billion pounds.

There was a sharp improvement in the goods trade deficit with non-countries, which narrowed to 2.982 billion pounds — the smallest since May.

This was not enough to prevent a deterioration in Britain's trade performance during the third quarter as a whole, however, which looks likely to be a sizeable drag on economic growth.

Until now, there has been little sign of any big boost to British exports from the sharp fall in the value of the pound after last year's vote to leave the

The ONS also released figures for construction that were much worse than forecasts.

Output in September plunged 1.6 per cent from August and was up only 1.1 per cent on the year — weakest annual growth since March 2016. The Reuters poll consensus had pointed to only a small month-on-month drop.

First Published: Fri, November 10 2017. 16:41 IST