UK industrial production in January rose for the third consecutive month, the longest period of growth in almost four years, as exports to Europe jumped, according to official data released on Thursday.

The Office for National Statistics said output of the production industries - a measure that includes manufacturing, energy and mineral extraction - grew by 0.4 per cent in January compared to December, above expectations for a 0.2 per cent improvement.

Manufacturers also enjoyed three months of expansion in a row, the last time this happened stretches back just to the early summer of last year. The sector matched forecasts with growth of 0.2 per cent in January against the previous month, boosted by increases in the output of transport equipment and paper, printing and publishing.

On a year-on-year basis, however, industrial production shrank by 1.3 per cent, a figure which left John Butler at HSBC concerned for the sector’s health.

“UK manufacturers are actually benefiting from strong global growth but are rapidly losing domestic market share. The one message from today’s set of data is that the pressure on UK manufacturers persists, in terms of volumes, margins and competition. The lack of a genuine manufacturing recovery relates more to their lack of competitiveness domestically than internationally,” said Mr Butler.

The ONS also released data on the UK’s trading position. These showed that domestic producers have been participating more in the economic rebound witnessed on the continent. Exports to the European Union climbed by 3.5 per cent, while imports from that area fell by 3 per cent, shrinking the deficit with the EU from £2.9bn in December to £2.bn in January.

Though the deficit with the rest of the world grew from £3.2bn to £3.7bn over the same period this left the balance on trade in goods in the red by £5.7bn, against £6.1bn in December.

Of particular note was the move back into deficit of the oil account. The UK’s imports of crude pushing it £12m into the red.

After adding a £2bn surplus in trade of services - down from £2.3bn - the total balance of trade in goods and services remained steady at £3.8bn.

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