Pound falls on weak industry data

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Uk factory workerFigure copyright Getty Images

The pound has hit a five-and-half year low against the dollar after timorous UK industrial production data.

At one point the pound traded at $1.4408, down a cent and a half, before recouping a little to trade at $1.4415.

Industrial output fell 0.7% in November from October – the sharpest drop b fail since early 2013 according to figures from the Office for State Statistics.

Unusually mild weather reduced electricity and gas consumption.

Building output shrank by 0.4% for a second month running, with a collapse in pharmaceutical production having the biggest im ct on total factory achieve.

‘Dire performance’

Analysts warn the figures suggest manufacturing development remains fragile, leaving Britain’s recovery relying on the service sector and consumer throw away.

“After a dire performance through much of 2015, November’s industrial forging figures suggest no change in the manufacturing sector’s fortunes,” said scrutiny group Capital Economics.

Com red with a year ago, industrial manufacture was up 0.9%, the weakest annual growth since July.

Output from the creating sector was down 1.2% from a year earlier.

Optimism deficient

Martin Beck, senior economic adviser to the EY Item Club, utter the manufacturing sector remained a major cause for concern.

“Although the late-model fall in the pound should provide some support to exporters, it is tough to find many other reasons for optimism around the manufacturing sector,” he reported.

“With manufacturing on course for only modest output growth in Q4 and the other components of industrial Canada display likely to have contracted, the economy is going to be almost wholly reliant on military talents to drive growth once again.”

The Bank of England will around its first monetary policy decision of the year on Thursday, but some analysts are not with child the Bank to raise interest rates until the back end of 2016.

Mixed prospect

Last week, the Chancellor George Osborne warned the UK economy was coating “a dangerous cocktail of new threats” as a result of slow global growth and a lessen visit in oil prices, which is a potential threat to the UK economy because of North Sea oil moulding.

On Tuesday the National Institute of Economic and Social Research (NIESR) – a mattered think tank – forecast healthy growth of 0.6% for the final three months of stand up year.

NIESR expects annual growth of 2.2% for 2015.

It said that there is “s rse s re ca city in the economy”.

The first official estimate of fourth shelter growth is due on 28 January.

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