Weak UK industrial and trade figures disappoint

Britain’s industrial output was flat in May, dashing hopes of a return to growth after the previous month’s 0.1 per cent fall.

The Office for National Statistics (ONS) also reported a 0.8 per cent fall in manufacturing production, far weaker than expectations of a 0.3 per cent increase. The data shows an accelerating decline following April’s fall of 0.2 per cent.

The results appear to run in contradiction to Markit’s purchasing manager index for manufacturing, which increased above expectations in June to 52.5 from an upwardly revised 51.5 in May (a number above 50 indicates growth).

Meanwhile, the country’s trade gap widened, with the ONS reporting a deficit of £8.491bn in May – up from £8.43bn in April, and the highest in six months. Even when taking into account services, the trade gap was still £362m higher than the previous month’s figure of £2.435bn.

On the news, sterling fell over half a cent against the US dollar to $1.489.