January 10, 2018 / 1:09 PM / 9 months ago

UPDATE 1-Industry gives Brexit-bound UK economy a shot in the arm

    * Industrial output growth beats forecasts in November
    * Manufacturing posts seventh gain in a row
    * Data puts UK on track for solid, if unspectacular, end to
    * 2018 likely to prove more difficult, say economists

 (Adds reaction)
    By Andy Bruce and David Milliken
    LONDON, Jan 10 (Reuters) - British industry enjoyed solid
growth in November, benefiting from a global upturn that has
allowed the economy to outperform gloomy forecasts made after
2016's Brexit vote, although it still lags behind its
international rivals.
    The British economy grew more slowly than all other Group of
Seven members in the first nine months of 2017 as
consumer-facing sectors suffered from a surge in inflation
caused by sterling's post-Brexit vote plunge.
    With departure from the European Union set for March 2019,
few economists think growth will improve this year.
    But the latest official data signalled that industry remains
a bright spot: Manufacturers recorded their fastest annual
growth since March 2011 in the three months to the end of
November, expanding by 3.9 percent year-on-year.
    The sector, which accounts for around a tenth of British
economic output, also posted its seventh consecutive monthly
expansion - the longest unbroken run in more than 20 years.
    The National Institute of Economic and Social Research
(NIESR) said the figures pointed to GDP growth of 0.6 percent in
the last quarter of 2017, which would be the strongest of the
year and would lift full-year growth to 1.8 percent.
    The Bank of England said in November it expected growth to
stick at 0.4 percent in the last three months of the year, after
it raised its key interest rate for the first time since 2007.
    If growth turns out faster, it might boost the chance of the
BoE raising rates again in May rather than later in 2018 as most
economists expect.
    Financial markets were unmoved by the data, however.
    "The UK will need more than just strong industrial
production figures though if it is to fare well," said Christian
Jaccarini, economist at the Centre for Economics and Business
Research consultancy.
    Construction output in the three months to November
contracted 2.0 percent compared with the previous three months,
the biggest dip since August 2012, the Office for National
Statistics said.
    Earlier on Wednesday, the British Chambers of Commerce said
the economy looked set for an "underwhelming" 2018, with
business subdued ahead of Brexit and reluctant to invest,
according to its quarterly survey - the largest of its type.
    The ONS said industrial output rose by a monthly 0.4 percent
in November, compared with 0.2 percent in October, the ONS said,
spurring an annual rise of 2.5 percent. Economists taking part
in a Reuters poll had expected to see output rise 0.3 percent on
the month and 1.8 percent on the year.
    "There was strong and widespread growth across (British)
manufacturing with notable increases from renewable energy
projects, boats, planes and cars for export," ONS statistician
Ole Black said.
    Goods export volumes in the three months to November were
9.1 percent higher than the same period in 2016, though the
goods trade deficit exceeded all forecasts in a Reuters poll.
    Other countries are doing better. German industrial output
rose by 3.4 percent in November alone, its biggest gain since
2009 and one which puts the economy there on track for growth of
at least 2.2 percent last year.
    Figures for Britain's services sector - which is around
eight times the size of manufacturing and has been growing
slowly - are due out on Jan. 26. 
    Wednesday's data showed Britain's total trade deficit, which
includes goods and services, hit a five-month high of 2.8
billion pounds in November.
 ($1= 0.7384 pounds)

 (Reporting by Andy Bruce and David Milliken; Editing by Hugh
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below