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UK manufacturing growth surges to 1-1/2-year high, trade deficit narrows

[LONDON] British manufacturing output rose in September at the fastest monthly pace since April 2014 and the country's goods trade deficit narrowed more than expected, official data showed on Friday.

The Office for National Statistics said manufacturing output surged 0.8 per cent in September, compared with a 0.4 per cent increase in August. Economists polled by Reuters had expected only a 0.4 per cent increase.

Manufacturing and trade have mostly dragged on Britain's strong economic recovery over the past couple of years.

Manufacturers have struggled this year due to weak demand from crisis-stricken Europe and a sharp strengthening of the pound, although one survey this week suggested their fortunes improved in October.

Britain's trade in goods deficit narrowed to 9.351 billion pounds in September from 10.786 billion pounds in August, undershooting the Reuters poll consensus for a 10.6 billion pound gap.

Despite the improvement, the ONS said trade will likely make a negative contribution to British economic output in the third quarter.

It said the latest industrial production figures would have a negligible impact to its estimate for economic growth in the July-Sept period, which slowed to 0.5 per cent on the quarter.

Industrial output fell 0.2 per cent on the month, after rising 0.9 per cent in August. On the year, output rose 1.1 per cent, down from a 1.8 per cent annual increase in the previous month.