- IHS Economics
UK industrial production recovered in January after a sharp decline in December, led by a stronger than expected increase in manufacturing. Industrial output climbed 0.3% from December, when it dropped 1.1%, according to the Office for National Statistics. Economists, however, had expected a gain of 0.4%. Manufacturing increased 0.7%, while utilities increased production by 4.3%. The findings of the Confederation of British Industries survey showed the recent depreciation of the Pound helped some manufacturing firms to stabilize output and export orders. The CBI said that despite market volatility in emerging markets, China still represents a huge opportunity for the UK's industry. Industrial output remained 10.2% below its peak in early 2008 during three months to January 2016, while manufacturing production was 6.4% smaller.
The UK economy slowed in the second half of last year and economists predict that it could lose more momentum in early 2016. Analysts say that Britain's referendum on its European Union membership could also drag on growth. The EEF, an association of British manufacturing employers, revised its 2016 UK growth outlook down to 1.9%, from 2.1% and lowered its manufacturing growth forecast to 0.6% from 0.8%.
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