British manufacturing output slowed further than expected in July causing the country’s trade deficit to widen, according to official figures released on Wednesday.
Manufacturing output contracted by 0.8 percent in June and 0.4 percent in July, with the industry affected more than usual by the summer shutdown of vehicle production lines. Economists had been expecting a slight increase on the month.
Increasingly weak demand in China, as well as European countries, has led to a difficult few months for auto manufacturers. A group representing the sector said this week it had halved its forecast for growth this year after overseas orders fell to their lowest since the financial crisis.
A further weakening in Britain’s manufacturing sector has increased dependence on the services sector to power economic growth; weak figures are likely to cause the Bank of England to hesitate when deciding whether to raise interest rates in the near future.
