Tuesday, December 13, 2011

UK manufacturing adds to economic gloom

Britain's manufacturing sector fared worse-than-expected in October, shrinking 0.7pc and reinforcing fears that the wider economy will contract in the fourth quarter.

Economists had forecast a smaller decline of 0.3pc, but the eurozone debt crisis dealt a heavier blow to demand.

The Office for National Statistics data were "hugely disappointing" according to Howard Archer, chief UK economist at IHS Global Insight.

"Hopes that the manufacturing sector could see extended healthy growth and help the economy to see more balanced activity now seem a distant memory," he said.

Broader industrial production - which includes mining and utilities as well as manufacturing - also contracted by 0.7pc against expectations of a 0.3pc fall.

The weak data suggested production could act as a drag on growth in the final quarter of the year, as producers are hit with falling demand for their goods both at home and abroad. more