UK manufacturing output falls sharply
Figures from the Office for National Statistics (ONS) have revealed that UK manufacturing output is falling at the fastest rate since the early 1980s.
Industrial output has now fallen for nine consecutive months.
The figures are likely to trigger concerns that the economy is contracting faster than forecasted.
The ONS said output fell 7.4% compared with a year earlier – the largest fall since June 1981. The decline was 2.9% between October and November – significantly below City forecasts of 0.7% drop and heightening fears of a deeper recession.
James Knightley, an economist at ING, said that the UK economy could contract by around 3% this year.
Manufacturing is likely to continue to fall despite the weaker pound, making UK goods more competitive on international markets, according to Paul Dales, UK economist at Capital Economics.
Today’s news is likely to reiterate that further interest rates are needed to stave off a prolonged recession.
Yesterday, the Bank of England cut interest rates to 1.5% – the lowest level since the Bank was established 315 years ago.
Today’s figures from the ONS add to a week of bad news after Nissan announced 1,200 job losses at its Sunderland plant yesterday.
Womenswear company Viyella called in the administrators earlier this week.
Meanwhile, china and glass company Waterford Wedgwood was placed into administration earlier this week, while yesterday, Sofa Workshop was reported to be on the verge of administration.