Manufacturing and construction sectors 'weak' in May, trade deficit widens

Manufacturing and construction sectors 'weak' in May, trade deficit widens

Economists polled by The Wall Street Journal had forecast industrial production would rise by 0.5%.

EY Item Club chief economic adviser Howard Archer says the figures come on the back of several months of soft data and are set to drag of Q2 GDP growth.

Economists said the figures suggest any rebound in growth from the first quarter will be muted and could delay an interest rate hike by the Bank of England, which is increasingly anxious about import price increases stoked by the pound's sharp fall in value since last year's Brexit vote. In March, Prime Minister Theresa May triggered the two-year Brexit process but discussions only began in June after a general election in which her Conservative Party lost its majority in parliament.

Manufacturing output fell by 0.2% compared with April, according to the Office for National Statistics (ONS).

Likewise, manufacturing output climbed 2%, in contrast to a 1.3% drop in the previous month.

The strength of next Wednesday's official data on wages is now likely to be critical for BoE policymakers as they mull whether to raise interest rates from their record low 0.25 percent. MPCOIS=ICAP Some BoE policymakers have been pushing for the first interest rate hike in a decade.

United Kingdom manufacturing output fell unexpectedly in May, with the sector hit by a drop in vehicle production, according to official figures.

Data published on Thursday had shown strong foreign demand raised industrial orders in May, though the increase was less pronounced than expected.

In a further blow, United Kingdom construction output fell by 1.2pc in May and by 0.3pc on the year, which the ONS blamed on "falls in both fix and maintenance, and all new work".

Things looked brighter in terms of volumes of goods exported in the three months to May, which rose 3.8 percent.

The ONS figures add to other gloomy data released yesterday showing slower rates of expansion across manufacturing, services and construction - with the weakest rate of growth seen in the services sector, as weaker consumer spending had an impact.

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