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Output in the UK’s industrial sector shrank in January, bringing the country’s annual growth rate sharply down after it hit a six-year high at the end of the year.

Industrial production, which accounts for around 15 per cent of the UK’s economic output, fell by 0.4 per cent over the month, returning to contraction after two months of growth, according to the Office for National Statistics.

Growth in the mining and energy industries meant the overall decline was slightly less severe than predicted by economists, but the manufacturing sector performed worse than expected. Manufacturing output declined by 0.9 per cent, in contrast to a predicted 0.7 per cent fall.

On an annual basis, overall industrial production was 3.2 per cent higher than twelve months ago, in line with forecasts. Manufacturing production increased by 2.7 per cent, compared with expected growth of 2.9 per cent.

Recent results from IHS Markit’s PMI surveys, which provide an early look at how the manufacturing sector fared in February, suggest the outlook is not likely to improve in the coming months, with economists seeing signs that the UK is “entering stagflation“.

However, Kate Davies, ONS senior statistician stressed that manufacturing growth had shown strength overall in the last three months.

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