THE TAKEAWAY: UK production expanded in December -> Bank of England expected to increase QE -> GBP awaits BoE rates, QE decision
UK Industrial and manufacturing production rose more than forecast by economists in December. Monthly industrial production came in at 0.5% versus the expected 0.2%, while manufacturing production rose a full percentage point.
The only weak spot was yearly industrial production, which was released at -3.3% versus the expected -3.1%. Yearly manufacturing production rose above expectations by half a percentage point. A breakdown of the data showed that the overall rise was led by increases in the transport equipment and food sectors.
Cable jumped by about 20 points on the news, but markets remained more focused on the Bank of England’s release expected later in the day. The central bank is expected to keep interest rates at current levels while increasing its asset purchase target by 50 billion pounds.