By Marcus Leach

New data has revealed that UK production output fell by 2.3% between May 2012 and May 2013, whilst manufacturing fell by 2.9% over the same period.

The Office for National Statistics' data showed that the main manufacturing components contributing to the fall between May 2012 and May 2013 were the manufacture of machinery and equipment not elsewhere classified; the manufacture of rubber and plastic products & other non-metallic mineral products; and the manufacture of basic metals & metal products.

"We have to remember that this manufacturing data is for May so it’s a little bit retrospective but it will no doubt weigh on the Q2 UK GDP figure," Richard Driver, Caxton FX Analyst, said.

"However, the most recent PMI figures do point to an acceleration in the manufacturing sector over Q2, while other areas in the UK economy are in encouraging shape. We remain on track for a 0.5% Q2 GDP figure later this month.

"In light of Mark Carney’s forthright entrance, the market remains very jittery with respect to BoE monetary policy and this morning’s data will only add to this theme; sterling’s knee-jerk sell off is evidence of this."

The ONS warned that we should be cautious when comparing movements between May 2012 and May 2013 data. In 2012, the end of May bank holiday was moved to June resulting in an additional working day in May, which may have been a contributing factor to the growth between these two periods.