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UK industrial output unexpectedly falls in June

[LONDON] British industrial output unexpectedly eased in June as the production of oil and gas and mining fell, official data showed on Thursday.

Industrial output fell 0.4 per cent in June, against expectations for a 0.1 per cent rise and from a 0.3 per cent increase in May, the Office for National Statistics said.

However, output in manufacturing increased 0.2 per cent in June, as expected by economists in a Reuters poll, partially recovering from a 0.6 per cent drop in May.

There was a broad slowdown in oil and gas production, partly due to maintenance in a major oil field, the ONS said. Falling 5.8 per cent in June, it was the biggest monthly drop in oil and gas production since January 2014.

The ONS revised down its estimate for industrial output growth in the second quarter to 0.7 per cent on the quarter from 0.1 per cent. But that would have a negligible impact on economic growth for that period.

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Britain's manufacturers have struggled this year due to weak demand from crisis-stricken Europe and a sharp strengthening of the pound.

A survey this week showed Britain's manufacturing sector growing only weakly in July, underscoring the challenge for policymakers to achieve more balanced long-term economic growth.

Britain's solid economic rebound has been driven by the services sector.

Compared with a year ago, industrial output was up 1.5 per cent, undershooting a Reuters poll forecast for growth of 2.2 per cent in June.

The data release comes shortly before the Bank of England announces its latest interest rate decision.

The Monetary Policy Committee is expected to leave borrowing costs unchanged at 0.5 per cent but to show a split for the first time this year on the need to raise rates immediately.


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