Industrial production fell in the three months following the EU referendum, according to the Office for National Statistics.
Tuesday’s figures, which measure the output from Britain’s factories, oil rigs and chemical plants, found a decline of 0.5 per cent in the third quarter compared with the previous three months. Industrial production accounts for about 15 per cent of gross domestic product.
The main cause was a 0.9 per cent drop in manufacturing output, which accounts for 70 per cent of Britain’s industrial production. This was partially offset by a 4.9 per cent increase in the mining and quarrying category, which includes the North Sea oilfields and makes up 12 per cent of production.
Industrial production remains higher than it was a year ago, largely because of a big increase of 2 per cent during April.
Kate Davies, a senior statistician at the ONS, said: “There are no obvious signs so far of either the weaker pound or post-referendum uncertainties affecting the output of UK factories, which continued broadly in line with recent trends.”
Figures on the economy following the June 23 vote to leave the EU have been better than expected and this week the British Retail Consortium reported that in October, retail sales grew at their fastest pace since January. The first estimate of growth in the third quarter was 0.5 per cent, above what the Treasury had forecast. Surveys of purchasing managers have also found expanding activity.
On a monthly basis, manufacturing was up by 0.6 per cent while overall industrial production fell by 0.4 per cent. Analysts had expected 0.1 per cent growth.
Samuel Tombs, chief UK economist of Pantheon Macroeconomics, said: “September’s fall in industrial production primarily reflects volatility in oil production and the dampening impact of unusually warm weather on heating demand.”
The National Institute for Economic and Social Research has also published its latest growth estimate, predicting the economy grew by 0.4 per cent in the three months to October, slower than the 0.5 per cent in the three months to September.
The think-tank’s model, which is used by the Treasury, estimates that industrial output declined by 0.5 per cent in the quarter ending in October.
“Robust consumer spending growth continues to support the economy,” said Oriol Carreras, a research Fellow at Niesr. “Looking ahead, this contribution from consumers is expected to wane over the course of next year due to a substantial rise in the rate of inflation.”
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