"Manufacturers will be hoping that the recent extended good news on the U.K. economy further lifts business and consumer confidence which in turn translates into sustained higher demand"
- Howard Archer, an economist at IHS Global Insight
The Pound moved further away from the strong psychological level of 1.6 against the U.S. Dollar on Wednesday, supported by strong factory output and a solid gain in property prices. The cable soared 0.44% to 1.6113 after the Office for National Statistics said U.K. industrial output rose 0.9% from August, when it plunged 1.1%, outpacing analysts' predictions for a 0.6% increase. Moreover, factory production surged 1.2%, following a 1.2% drop in August. The main contributors to the surge in production output were mining and quarrying, which rocketed 1.26% annually, the highest since 1997. However, Wednesday's data for the whole Q3 showed the output rose as much as 0.6%, and according to ONS economists it would not have real, one-decimal, impact on the second revision of GDP later in November.
Also Wednesday, the mortgage unit of Lloyds Banking Group Plc said that U.K. house values ticked up 0.7% in October, the biggest gain in three months, hitting an average of 171,991 pounds. On a yearly basis prices were 8.1% higher. A constant rise in house prices has fuelled concern that government schemes may lead to another housing bubble and that the recovery is based only on the strong demand for property. Nevertheless, strong figures from all three sectors are suggesting the recovery is broadening and may become sustainable.
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