By Lea Pachta
The UK economy has received further encouraging news this morning following data which revealed that industrial production grew by 0.4% in November.
The figures were a strong improvement on the 0.1% slide recorded in October and slightly higher than the more modest forecast of 0.3%. The data was somewhat marred however, as manufacturing production held steady on the month. This marks the second consecutive month that the industry has failed to expand, and falls beneath expectations for 0.3% growth. However, analysts are expecting to see improvement in the sector this year, especially as exports rebound amid the weaker UK currency.
Duncan Higgins, senior analyst at Caxton FX stated, “The encouraging industrial production figures appear to have offset the slightly disappointing data from the manufacturing sector.
Following a brief dip, the market has continued to take the pound higher this morning, with expectations rising that the UK economy has finally returned to growth. Though the data was not as supportive as some had hoped, the weak pound over the past few months has boosted exports. This should lead to stronger production readings for December.”
Currently the pound is hovering just below €1.12. It briefly reached over that level but was unable to consolidate its position, given the underlying uncertainty in the economy. Similarly against the US dollar, sterling is up over half a percent on the day, but struggling to push through $1.6250.