"The economic recovery is quickly losing momentum"
- Samuel Tombs, an economist at Capital Economics Ltd.
U.K. manufacturing sector gained less than expected in September, as machinery and chemical production declined, a sign economic recovery is losing momentum, the U.K. Office for National Statistics reported Tuesday. Manufacturing production in the U.K. expanded 0.1%, below the 0.4% which had been highly estimated by analysts. At the same time, total industrial output plunged 1.7%, hit by a record drop in oil and gas production.
"The economic recovery is quickly losing momentum," Samuel Tombs, an economist at Capital Economics Ltd. in London, said in a research note. "While the MPC may pause QE at its meeting later this week, if the economic data remain weak then it may not be long before the committee is forced to provide the economy with further stimulus."
"Manufacturers remained cost-cautious overall, leading to lower levels of purchasing and further depletion of inventory holdings. The rate of reduction in input buying volumes accelerated sharply and was one of the fastest signalled during the past three-and-a-half years," said Markit economist Rob Dobson.
The FTSE 100 Index edged higher 0.79 per cent to 5,884.90. The broader FTSE All-Share Index rose 0.72 per cent to 3,074.52.
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