Manufacturing output in the UK was better than expected in March, the latest figures from the Office for National Statistics (ONS) have suggested.
The ONS said that manufacturing output in March rose 0.9%, compared to the previous month. This was better than initial forecasts for manufacturing output, which had estimated a rise of 0.5%.
But the surprise performance, despite outstripping estimates, did nothing to the change the GDP for the first quarter of this year – which saw the UK economy fall back into recession after a 0.2% contraction.
This is due to the poor performance of the manufacturing sector in February, when output slumped by 1.1% compared to the previous month.
In addition, a wider measure of overall industrial output, which includes energy production and mining, dipped by 0.3% in March.
This has been put down to one of the warmest Marches on record, which suppressed demand in the energy sector.
There were steep declines in mining and quarrying, especially in oil and gas extraction, and a fall in electricity output.
Analysts have said the performance of the manufacturing sector shows that the UK economy is not on its knees, but is still vulnerable to international markets.
“The US has been something of a bright spot for exporters, but even there signs have appeared to show growth weakening,” said Chris Williamson, chief economist with financial services company Markit.
“At the same time, demand at home clearly remains very subdued amid ongoing low levels of business and consumer confidence. There appear to be very few sources of new sales growth for UK producers at the moment,” he added.
In the face of rising inflation and a double dip recession, the Bank of England’s Monetary Policy Committee (MPC) announced today that it is halting its programme of quantitative easing.
After a £325 billion asset purchase programme in recent years, £50 billion of which came in the last few months, additional quantitative easing was not expected this month.
“The combination of sluggish activity and sticky inflation put the MPC in a difficult position, and this decision is likely to have been a close call,” said Ian McCafferty, chief economic adviser at employers group the CBI.
“But it appears that the persistence of inflationary pressures tilted the balance in favour of keeping the stock of asset purchases unchanged,” he added.
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