"The risks of a triple-dip have increased with today's figures"
- Rob Wood, an economist at Berenberg Bank
Manufacturing output in the U.K. contracted unexpectedly in November, while the industrial output rose less than initially was expected, indicating the economy is likely to shrink in the final quarter of 2012. The Office of National Statistics said that factory production fell by 0.3% from October, while analysts' had predicted a 0.5% expansion. At the same time, industrial output added only 0.3% from October, when it fell 0.9%. The reading proves that Britain's economy is struggling to gain traction after emerging from a recession in the third quarter.
"The risks of a triple-dip have increased with today's figures," said Rob Wood, an economist at Berenberg Bank in London and a former central bank official. "The BOE will probably stick to their view for a while longer, but expect further stimulus in the second half of the year."
Also Friday, the National Institute of Economic and Social Research said that the U.K. economy contracted by 0.3% in the last three months of 2012. In case the figure will be confirmed, the economy returned to growth for only a single quarter.
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