- Elizabeth Martins, HSBC
British manufacturing activity jumped unexpectedly in September amid rising inflationary pressures, official figures revealed on Tuesday. According to the Office for National Statistics, factory output rose 0.6% month-over-month in September, the biggest increase since April, up from the preceding month's gain of 0.2%, while market analysts anticipate an acceleration of 0.5%. On annual basis, manufacturing output grew 0.2%, surpassing forecasts for a 0.5% fall. Nevertheless, the country's manufacturing output dropped 0.9% in the Q3. On the negative side, industrial production declined 0.4% in September, unchanged from the previous month, whereas economists expected to see an increase of 0.1% in the reported month. Year-over-year, industrial output advanced 0.3%, although analysts predicted a rise of 0.8%. On a quarterly basis, UK industrial production declined 0.5%. The September fall in industrial output was mainly driven by a decrease in demand for heating amid warmer-than-usual weather and planned maintenance in oil and gas fields of the North Sea. Economic activity in the manufacturing sector is expected to expand markedly in the upcoming months due to the weak British Pound, which fell sharply after the country's decision to leave the European Union.
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