You could quite feasibly say that economic data releases are like London buses. You wait ages for one and three come along at once – and invariably they aren’t the busses you wanted.
This morning there were positive data releases for the UK in the form of better-than-forecast retail sales and a six month high house-price index, but a negative release was careering round the corner behind them.
Today the Office for National Statistics asserted that UK manufacturing dropped by more-than-expected in August. In July factory output climbed 3.1 per cent but in the following month it was knocked back by 1.1 per cent.
This figure was 0.4 per cent higher than predicted by economists involved in a Bloomberg survey.
10 of the 13 manufacturing categories reported a drop. Of the three remaining categories one stayed the same and only two recorded an increase.
Some sectors, like transport equipment, were hit harder than others and caused manufacturing and overall industrial output to fall by 1.2 per cent in August from a year earlier.
In response to this news and the IMF slashing the UK and global economic outlooks, an economist with Markit Economics stated: ‘The economy may still pull out of its recession in the third quarter, but a return to contraction in the fourth quarter cannot be ruled out.’ Chris Williamson went on to say; ‘The underlying growth momentum clearly remains extremely weak’.
This viewpoint is concerning given the fact that growth in the third quarter has been widely anticipated.
According to a separate report, in August exports plummeted by 4 per cent whilst imports increased by 4.5 per cent. The goods-trade deficit also widened to 9.84 billion Pounds.
The Pound reacted to the news by losing ground against its US competitor for a second day.
As of 14.39:
The Pound to Euro exchange rate is currently trading at 1.2391
The Pound to US Dollar exchange rate is currently trading at 1.6012
The Pound to Australian Dollar exchange rate is currently trading at 1.5661
The Euro to US Dollar exchange rate is currently trading at 1.2921
The Euro to Pound exchange rate is currently trading at 0.8068
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