Published on : Mar 12, 2015
Manufacturers in Britain cut down their activity for New Year as figures showed a slump of 0.5% in January 2015, as compared to February 2015. This drop resulted in an unexpected reversal of industrial output as well, which slumped by 0.1% in the same period. This comes as terrible surprise as economists who were a part of Reuters’ poll had indicated that the industrial output will go up by 0.2%.
The currency also experienced a drop as sterling’s value dropped by a cent against the dollar to reach US$1.50. This fluctuation is a reflection of the news that the British economy is likely to lose its pace as manufacturing sector continues to suffer. On a happier note, the services sector has managed to recuperate from the slide to climb above its earlier output. However, industrial production and manufacturing, which are inclusive of energy and mining sector, will remain under the weather.
The Office for National Statistics reported the industrial production plummeted by 0.2% in December 2014, due to oil rig maintenance in the North Sea. The drop in January was blamed on poor factory output due to manufacturers of computer electronics who slashed their production plans by 10% due to declining orders.
Chief market analyst at FXTM, Jameel Ahmad stated the poor figures as shown by the industrial production which are way below expectations has made reduced the level of optimism that was felt as UK gained an economic momentum in early 2014. The problem has been worsened by a warmer winter and dropping oil prices in the past eight months.