- Howard Archer from IHS Economics
The manufacturing PMI disappointed markets last week. Due to volatile gas and oil production, manufacturing output for March was expected to fall short of analysts' expectations as well. The economy, however, proved once again that nothing can stop it from gaining momentum further, continue adding pressure on Mark Carney to start raising interest rates.
Friday's report from the Office for National Statistics, output and manufacturing sector expanded 0.5% in March following February's 1% gain. Economists predicted only a 0.3% increase. Figures also showed that a broader industrial output plunged 0.1%, as extraction of gas and oil deteriorated. The decline was also smaller than originally was expected. On a quarterly basis, manufacturing output soared 1.4%- the strongest pace since 1999, bolstering the case the U.K. will be the fastest growing developed economy this year.
A separate report from the ONS unveiled the U.K. trade gap narrowed more than expected in March, revision of January and February trade balance pointed at a stronger performance of trade in the first quarter. Total trade deficit stood at 1.3 billion pounds, up from 1.7 a month earlier. The goods trade balance was also in a smaller deficit from the month ago. The U.K. trade sector still remains one of the weakest points of the economy, generating persistent deficits in trade in goods.
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