April saw worst month for UK manufacturing in over five years, with a 1.4 percent fall in factory production.
According to the Office for National Statistics (ONS), April was the steepest fall since October 2012 and marked the third consecutive fall.
“Manufacturing fell in the three months to April with electrical machinery and steel for infrastructure projects seeing reduced production,” said Rob Kent-Smith, the ONS’ head of national accounts.
“International demand continued to slow and the domestic market remained subdued. However, oil and gas production grew strongly in the aftermath of the Forties pipeline closure at the end of last year.”
The poor results led to the fall in the pound, which slipped 0.35 percent against the dollar to $1.3368.
Construction was also weaker than expected for April and grew just 2.3 percent in May.
Suren Thiru of the British Chambers of Commerce said: “It is possible that the UK is now moving past the recent sweet spot for exporters, with growth in key markets moderating and the impact of the post-EU referendum slump in sterling, which has helped some exporters, subsiding. The possibility of an escalating trade war has added to the downside risks for exporters.”
GDP growth in the first quarter of the year slumped to 0.1 percent. The Bank of England held off from increasing interest rates in May and remains optimistic for positive results.
“The very poor set of April industrial production, construction output and trade data can only fuel Bank of England concerns and uncertainties over the economy and there can be no doubt that the [Bank’s Monetary Policy Committee] will leave interest rates unchanged at their June meeting next week,” said Howard Archer of the EY Item Club.
“The data also make an August interest rate hike by the Bank of England look a lot more questionable,” he added.
The UK trade deficit was also seen to increase to £5.3 billion in April. This is the largest amount since September 2016.
