Weak Manufacturing Data Exerted Pressure On The Pound
UK industrial production unexpectedly declined at the beginning of the second quarter. Data from the Office for National Statistics showed that industrial production fell by 0.8% mom 1.8% yoy in April, versus expectation of 0.1% mom 2.7% yoy. Manufacturing production declined by 1.4% mom 1.4% yoy, versus expectation of 0.3% mom 2.9% yoy, and prior -0.1% mom 2.9% yoy. Construction output rose 0.5% mom in April versus expectation of 2.4% mom and prior -2.3% mom.
The April dip was the steepest fall since October 2012. According to the ONS, the monthly fall in manufacturing was driven by basic metals and products, and other manufacturing and repair, dipping by 0.5% and 0.3% respectively.
The pound lost its value after the Office for National Statistics reported UK manufacturing had its worst month in more than five years in April. The GBP/USD pair was down 0.35% at 1.3368. Sterling also fell 0.5% against the euro to hit 1.1343.
The UK National Institute of Economic and Social Research (NIESR) expects that the Britain’s economy will increase by 0.2% in May, slightly improving the weak beginning of 2018. According to official figures, the UK economy grew only 0.1% in the first quarter of 2018.