Sterling has taken a tumble after weak industrial and manufacturing data this morning, falling dramatically against the dollar on the news.
Industrial production's growth was flat in May. Analysts had anticipated growth of 0.2 per cent after falls of 0.1 per cent last month (revised from 0.1 growth).
Manufacturing production was expected to rise by 0.3 per cent this month, after suffering a fall of 0.2 per cent in the previous period. But the decline accelerated, falling by 0.8 per cent.
Samuel Tombs, UK economist, Capital Economics:
May’s UK industrial production and trade figures are something of a disappointment given the upbeat tone of the surveys and indicate that the overall recovery is still largely dependent on the services sector.
Meanwhile, the overall trade deficit widened from £2.1bn to £2.4bn, its largest this year, as the value of exports fell for the second consecutive month and imports picked up.
As things stand, then, both industry and trade seem unlikely to make much of a contribution to GDP growth in the second quarter. Thankfully, the rest of the economy seems to be picking up for now. But a more sustained and healthy recovery will require exports and industry to revive too.