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Output in the UK’s industrial sector suffered a shock contraction in February pushing the pound lower.
Industrial production, which accounts for 15 per cent of the UK economy, fell by 0.7 per cent in February compared to January – its second consecutive month of declines and defying expectations of a return to growth. January’s figures were also revised down to -1 per cent from -0.9 per cent.
Figures from the Office for National Statistics showed manufacturing output, which accounts for the single largest element within industry at 70 per cent, was also down 0.1 per cent month on month. Economists polled by Reuters had expected a rise of 0.3 per cent.
Sterling weakened after the release, charting a 0.3 per cent decline on the day so far against the dollar to $1.2430.
The ONS said February’s production declines were spread across all sectors, with energy proving the biggest drag with a 3.4 per cent contraction. This mirrors performances in French and Spanish industry also out today where the energy output contributed to a broader slump.
Kate Davies, statistician at the ONS said an “unseasonably warm” bought of weather had pushed down electricity and gas use so far this year.
Industrial production measures performance in sectors such as mining and quarrying, manufacturing, energ, water supply and waste management.
On a three month basis, the UK’s industrial production was still up 2.1 per cent – matching its previous quarterly pace and the highest level of expansion since May 2010.
Production in February 2017 was 2.8 per cent higher than the same month last year, said the ONS.