Manufacturing shows October pick-up
• 0.6% October rise was best since March
• 0.2% fall in wider industrial output blamed on seasonal factors
British manufacturing output rose twice as fast as expected in October, but a sharp decline in mining and oil and gas extraction due to seasonal factors pulled down the wider industrial measure of output, official data showed on Tuesday.
The figures are unlikely to alter expectations that the Bank of England will leave interest rates on hold this month and for many months to come as policymakers weigh up the risks to the recovery from upcoming government spending cuts.
British manufacturing output rose 0.6% in October, its biggest rise since March, the Office for National Statistics said, and double expectations for a 0.3% rise.
However, the wider measure of industrial output fell 0.2% on the month, the weakest since June and confounding expectations for a 0.3% rise.
The drop was mainly due to sharp falls in mining and oil and gas extraction after maintenance work was carried out earlier than usual this year, therefore any rebound came in previous months.
Manufacturing output was “a storming figure”, according to Briain Hilliard of Société Générale, who said further gains should be expected in November.
“Stronger utility numbers with the colder weather should also give a pick-up in IP (industrial production). It shows the economic recovery is continuing, although of course we need to look at the services side too. The biggest influence on the Bank of England will be the inflation profile and we know that is problematic.”
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