UK industrial output rises in May
BRITISH industrial output rose faster than expected in May, taking its annual rate of growth to its highest in almost 10 years despite heavy downward revisions to April’s figures, official data has shown.
The figures support survey evidence that a competitive exchange rate is helping manufacturers recover from last year’s deep recession, and reinforce the view that April’s fall in output was not the start of a new downward trend.
The Office for National Statistics said industrial output rose by 0.7 per cent in May, almost twice as fast as analysts had expected.
That took the annual rate to 2.6 per cent, its highest since June 2000.
Nonetheless the increase in the annual rate was smaller than the 3.1 per cent analysts had expected and April’s contraction in industrial output was revised to 0.7 per cent from 0.4 percent.
The ONS said this revision was due to a combination of late data, seasonal adjustment and an annual re-weighting of industry subsectors.
“The upward trend in output should remain in place,” said Brian Hilliard, economist at Societe Generale. “The business surveys are peaking but at pretty high levels, and there is clearly a degree of optimism there.”
UK financial markets were little changed after the data which comes hours before the Bank of England concludes its monthly policy meeting — one that is not expected to change the BoE’s current record low interest rate.
The narrower measure of manufacturing output – which excludes resource extraction and utilities – rose by 0.3 per cent on the month, in line with forecasts.
On the year manufacturing output was up 4.3 per cent, its biggest annual increase since December 1994.
In manufacturing the monthly increase was driven by electrical and optical equipment, basic metals and metal products.