UK industrial output grows at forecast rate

British industrial output grew in line with expectations in September, though its manufacturing component was slightly weaker than forecast, official data showed.

The figures do not point to any future revision of the initial third-quarter GDP estimate, and will not shift market expectations that the Bank of England will keep interest rates at record lows for many months to come.

The Office for National Statistics said that industrial output grew 0.4 per cent in September, the same as an upwardly revised 0.4 per cent for the previous month, and in line with economists' forecasts.

However, the manufacturing component slowed slightly more than expected to 0.1 per cent, its weakest pace of growth since April, after expanding by an upwardly revised 0.4 per cent in August.

Industrial output was up 3.8 per cent on the year, while manufacturing grew by an annual 4.8 per cent in September.

Separate figures showed Britain's deficit in global trade for goods and services fell to its lowest level since June, shrinking to £4.57bn in September from £4.8bn.

The trade in goods both globally and excluding the EU showed a similar trend.

Iain MacDonald of Barclays Corporate said: "Despite some encouraging figures coming out of the UK manufacturing sector recently, a resulting increase in export figures is still yet to be realised despite a deficit reduction in September.

"However, we’re now seeing a marked increase in the interest amongst UK companies in developing opportunities abroad, particularly in the more traditional export destinations across Europe and North America. Although competition in these markets still remains tough, demand for UK goods remains buoyant."