British manufacturing output continues to grow to new post-financial crisis high

Jasper Jolly
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Manufacturing growth continued at a steady rate (Source: Getty)

British manufacturing growth held steady at the end of last year to continue its rise to its highest output since the financial crisis in 2008.

Manufacturing output grew by 0.3 per cent in December, which translated to three-month trend growth of 1.3 per cent, the Office for National Statistics said today.

The index of manufacturing production rose to a reading of 105.8, its highest since February 2008.

Read more: British manufacturing growth slows as cost pressures start to tell

Manufacturing output has risen continually in every month since April last year, buoyed by the devaluation of sterling against the euro – although, remarkably, it still remains 0.5 per cent below the peak it hit a decade ago.

Bank of England governor Mark Carney yesterday said exporters, including a large proportion of manufacturers, are still in a "sweet spot" as the weaker pound improves margins when prices are quoted in other currencies.

However, Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the sugar rush from the sweet spot will start to fade soon as the effects of the sterling devaluation fade from the figures, while rising oil prices are starting to raise input costs.

Read more: Manufacturing growth slowed in January

"Manufacturers will continue to benefit from strong global growth, but they likely will struggle to replicate last year’s strong performance," he added.

The broader industrial figures, which include resource extraction industries as well as manufacturing, plunged in December because of the closure of the Forties oil pipeline because of a fracture.

Mining and quarrying output fell by 19.1 per cent month-on-month in December. That ended the longest unbroken run of growth in industrial production for 23 years, said Pantheon's Tombs.

Read more: UK car manufacturing drops for the first time in eight years