Manufacturing output fell for a fourth consecutive month in June and at the sharpest annual rate in 2-1/2 years, official data showed on Tuesday, offering further evidence the economy is slowing sharply.
The Office for National Statistics said manufacturing output fell 0.5 percent on the month, well below analyst forecasts for an unchanged reading and marking the first time factory output has fallen for four months in a row since 2001.
On the year, manufacturing output fell 1.3 percent, the biggest fall since December 2005. The broader measure of industrial production unexpectedly fell 0.2 percent on the month, taking the annual rate to -1.6 percent.
The ONS said the figures would shave about 0.06 percentage points off its initial estimate for second quarter GDP, which was reported as 0.2 percent growth.
"The manufacturing and industrial production data are very disappointing," said Philip Shaw, an economist at Investec.
The figures, alongside a third consecutive contraction in services sector activity reported on Tuesday, will raise expectations that Britain is on the verge of its first recession since the early 1990s.
The Bank of England, however, is expected to keep rates steady at 5 percent on Thursday because inflation is running at almost twice the official 2 percent target and is expected to spike to around 5 percent before the end of the year.
Twelve out of 13 subsectors showed declines in output in June. Industrial production makes up just under a fifth of the economy.
Source: http://uk.biz.yahoo.com/05082008/325/factory-output-shows-economy-slowing.html
