UK Industrial Output Increases Above Forecast

U.K. manufacturing increased in December by five times more than economists forecasted, and the total trade deficit shrank to the smallest since 2003, pointing to signs of economic strength at the end of last year.

According to the Office for National Statistics, factory output increased 1 percent from the previous month, and out of 13 categories of U.K. manufacturing, four fell on the month and nine rose. Transport equipment rose 3 percent and the manufacture of food, beverages and tobacco increased 1.3 percent.

Separate data showed the goods-trade deficit narrowed to 7.11 billion pounds in December from 8.91 billion pounds the previous month, as imports dropped by 3.6 percent, outpacing a 0.4 percent drop in exports.

The date shows signs of improvement in the economy at the end of a quarter, when the economy shrank 0.2 percent. While indexes of services, manufacturing and construction all showed growth in January, the Bank of England may still expand stimulus today to protect Britain from Europe’s debt crisis. The Bank of England may raise its target for bond purchases to 325 billion pounds at noon today in London.

Source: Bloomberg

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Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.