- Alan Clarke, an economist at Scotiabank
While the neighbouring Eurozone countries show uneven economic performance, casting further doubts over its economic outlook in the long run and making policy makers nervous, the U.K. also slightly disappointed economists on Wednesday as industrial production rose less than projected. According to National Statistics, Britain's manufacturing production rose modestly by a seasonally adjusted 0.3% in June, coming in below a 0.6% expected gain, whereas manufacturing output declined 1.3% in May. On an annual base, manufacturing production climbed 1.9% in June against economists forecast for a 2.1% advance, following a 3.7% gain in the previous month. The recent figures underscore uneven economic recovery in Britain, with some parts of the economy underperforming. Nevertheless, the soft numbers should not have any impact on the second revision to the U.K.'s GDP. The data came in as Bank of England policymakers begin their two-day gathering to discuss the country's ability to weather higher interest rates. Markets expect the central bank to raise its benchmark interest rate either at the end of this year or in early 2015 on the back of improving economic performance of the country. The soft data weighed on the Pound, as the nation's currency weakened versus the U.S. Dollar, losing 0.28% to trade at 1.6339, while ahead of the report the pair fetched 1.6856. Meanwhile, NIESR estimates that U.K. grew 0.6% in the Q2 compared to 0.9% expansion in the previous quarter.
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