UK Economy Still Struggling with Subpar Data
THE TAKEAWAY -> British industry grew slightly this month, but fell more than expected last month -> market reaction muted as focus remains elsewhere
Data from the UK industrial sector was mixed today due to extensive revisions of prior figures. Industrial production (MoM) edged the prediction by rising 0.2% instead of falling by the same number; however, the gains were mitigated by a revision to the previous figure from -0.2 to -0.4. The annual figure was also slightly above the predicted loss, coming in at -1.0% versus -1.1%, but offset by a change of the previous number from -0.7% to -0.9%.
Monthly manufacturing data came in at -0.3%, slightly below the predicted -0.2%, and the loss was exacerbated by a downward revision of the prior number from 0.1% to -0.2%. Finally, although yearly manufacturing data was lower than expected (1.5% versus predicted 1.6%), we saw a net gain because the previous figure was increased from 1.9% to 2.6%.
The mixed data comes against a backdrop of mediocre-to-weak data from industrial markets across Europe, most of which has been overshadowed by broader market concerns and the possibility of a credit crisis in the near future.
The pound continued to drop against the US Dollar following the mediocre UK industrial data, a reaction caused more by a rising Dollar index than by the newly released numbers. Overall, market focus remains on macro issues and less on news releases.
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