UK industrial output rebounds in September

Wed Nov 6, 2013 5:27am EST
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By William Schomberg and Christina Fincher

LONDON (Reuters) - British industrial output grew more strongly than expected in September as it bounced back from a fall the previous month, providing some reassurance that the country's economic recovery is not being driven only by consumption.

Output in the industrial sector - which makes up about a sixth of Britain's economy - climbed 0.9 percent during the month and was pushed up most strongly by manufacturing, the Office for National Statistics said.

Economists had expected a rise of 0.5 percent, according to a Reuters poll of economists.

Sterling jumped to a one-week high against the dollar and British government bond prices fell as investors took the data as another sign that the Bank of England might bring forward its timeframe for raising interest rates.

But economists cautioned against reading too much into Wednesday's figures and Britain's economy was still being driven by consumption and the services sector.

Alan Clarke at Scotiabank said the September recovery in industrial output merely reversed August's drop. "Taking the two together shows there was nearly zero growth in the last two months," he said. "There can only be better news to come."

Growth in industrial output over the three months to September slowed to 0.6 percent and meant there was no change to the estimate of Britain's overall economic growth of 0.8 percent between July and September.

Britain's economy has staged a surprisingly strong recovery in 2013 after struggling to get over the financial crisis. But it has depended largely on consumer spending which has been buoyed by a recovery in the housing market.   Continued...

Employees work on cars on the Nissan production line at the company's factory in Washington, northern England in this March 20, 2009 file photo. REUTERS/Nigel Roddis/Files