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| British industrial production grows at fastest pace in four years | British industrial production grows at fastest pace in four years |
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| British industrial production grew at the fastest pace in almost four years in April, boosted by the pharmaceuticals and energy sectors. | British industrial production grew at the fastest pace in almost four years in April, boosted by the pharmaceuticals and energy sectors. |
| The official figures, which took the City by surprise and sent the pound higher, are in contrast with other economic data that has pointed to a slowdown in the economy before the EU referendum on 23 June. | The official figures, which took the City by surprise and sent the pound higher, are in contrast with other economic data that has pointed to a slowdown in the economy before the EU referendum on 23 June. |
| Manufacturing output grew by 2.3% in April from the previous month, while the wider measure of industrial production, which also includes mining, oil and gas, posted a 2% rise. Both were the biggest increases since July 2012, according to the Office for National Statistics. City economists had expected flat readings. | Manufacturing output grew by 2.3% in April from the previous month, while the wider measure of industrial production, which also includes mining, oil and gas, posted a 2% rise. Both were the biggest increases since July 2012, according to the Office for National Statistics. City economists had expected flat readings. |
| Pharmaceuticals output jumped 8.6%, the biggest monthly rise since February 2014, with evidence of large export orders in the industry. Gas and electricity output rose 3.9% due to unusually cold weather, the ONS said. Both sectors are volatile. | Pharmaceuticals output jumped 8.6%, the biggest monthly rise since February 2014, with evidence of large export orders in the industry. Gas and electricity output rose 3.9% due to unusually cold weather, the ONS said. Both sectors are volatile. |
| Virginia Acha, the executive director responsible for research, medical and innovation at the Association of the British Pharmaceutical Industry, said: “After a period of general decline, today’s figures are the first sign of a welcome resurgence for UK medicines manufacturing and are an optimistic bellwether for the health and wealth of the UK economy.” | Virginia Acha, the executive director responsible for research, medical and innovation at the Association of the British Pharmaceutical Industry, said: “After a period of general decline, today’s figures are the first sign of a welcome resurgence for UK medicines manufacturing and are an optimistic bellwether for the health and wealth of the UK economy.” |
| In the three months to April, industrial output rose by 0.7%, the first increase this year. | In the three months to April, industrial output rose by 0.7%, the first increase this year. |
| Zach Witton, the deputy chief economist at EEF, the manufacturers’ organisation, said: “Whilst the size of the gain is surprising it generally fits with the picture that the worst may now be behind the sector. It also backs up the feeling that there are no concrete signs that uncertainty associated with the upcoming referendum has had a major impact on manufacturing.” | Zach Witton, the deputy chief economist at EEF, the manufacturers’ organisation, said: “Whilst the size of the gain is surprising it generally fits with the picture that the worst may now be behind the sector. It also backs up the feeling that there are no concrete signs that uncertainty associated with the upcoming referendum has had a major impact on manufacturing.” |
| The Bank of England has warned that economic figures are likely to be volatile and tricky to interpret in the run-up to the referendum. | The Bank of England has warned that economic figures are likely to be volatile and tricky to interpret in the run-up to the referendum. |
| Sounding a more pessimistic note, Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the jump in manufacturing output was likely to unwind over the coming months, noting that pharmaceutical products were volatile. | Sounding a more pessimistic note, Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the jump in manufacturing output was likely to unwind over the coming months, noting that pharmaceutical products were volatile. |
| “In addition, other categories of production likely were boosted by the recent weakness of the pound. Manufacturers will be hit by a rising pound after a remain vote, or lower business investment after Brexit. With surveys of manufacturers continuing to point to falling production, it’s simply too soon to conclude that April’s data mark a turning point in the industrial sector’s decline.” | “In addition, other categories of production likely were boosted by the recent weakness of the pound. Manufacturers will be hit by a rising pound after a remain vote, or lower business investment after Brexit. With surveys of manufacturers continuing to point to falling production, it’s simply too soon to conclude that April’s data mark a turning point in the industrial sector’s decline.” |
| Manufacturing accounts for about a tenth of the economy and remains 6.4% below its pre-financial crisis peak. The wider economy slowed in the first quarter to 0.4% GDP growth, compared with 0.6% in the final quarter of 2015. Business surveys published this week suggest economic growth could slow further to just 0.2% between April and June. | Manufacturing accounts for about a tenth of the economy and remains 6.4% below its pre-financial crisis peak. The wider economy slowed in the first quarter to 0.4% GDP growth, compared with 0.6% in the final quarter of 2015. Business surveys published this week suggest economic growth could slow further to just 0.2% between April and June. |
| Alan Clarke, at Scotiabank, said: “Whatever the cause, this release gives us some hope that second-quarter GDP will not be the washout that the surveys had made us fearful of. Presumably there will be some payback next month. Nonetheless, it wouldn’t be unreasonable for the industrial sector to add as much as a quarter percentage point to headline GDP, offsetting weakness elsewhere.” | Alan Clarke, at Scotiabank, said: “Whatever the cause, this release gives us some hope that second-quarter GDP will not be the washout that the surveys had made us fearful of. Presumably there will be some payback next month. Nonetheless, it wouldn’t be unreasonable for the industrial sector to add as much as a quarter percentage point to headline GDP, offsetting weakness elsewhere.” |