U.K. industrial output declined unexpectedly in January, as lower manufacturing output could only be partially offset by the rebound in oil and gas extraction, data from the Office for National Statistics revealed Wednesday.
Meanwhile, the British Chambers of Commerce today upgraded its economic growth outlook for the U.K., citing stronger than expected improvements in household consumption and services.
The business lobby estimates 2.7 percent growth for 2015, up from the prior forecast of 2.6 percent.
For 2016, the BCC projected 2.6 percent expansion instead of 2.4 percent. The economy is forecast to grow 2.6 percent in 2017.
The ONS report showed that the U.K. industrial output slid 0.1 percent month-on-month in January, while economists forecast a 0.2 percent rise for January, offsetting a 0.2 percent drop in December.
Manufacturing output, accounting for the bulk of the industrial production, declined 0.5 percent, confounding expectations for a 0.2 percent rise. This was the first fall in three months. In December, output had increased 0.1 percent.
Oil and gas extraction recovered in January, up 2.4 percent after declining 3.1 percent in the prior month.
While January's fall in manufacturing output was disappointing, it is not something to get too hung up about, IHS Global Insight's Chief UK Economist Howard Archer said.
The fall in oil prices looks set to provide some timely stimulus to the manufacturing sector's recovery, Paul Hollingsworth, a UK Economist at Capital Economics said.
Nonetheless, sterling's continued strength and the weakness of demand in the neighboring Eurozone should continue to act as a brake on growth in manufacturing output, he added.
On a yearly basis, industrial output increased 1.3 percent in January, faster than December's 0.8 percent rise. Economists had forecast 1.3 percent growth for industrial production.
There were increases in two of the four main sectors of industry, with manufacturing output being the largest contributor, increasing by 1.9 percent.
Nonetheless, manufacturing growth weakened from 2.6 percent seen in December. The annual rate was expected to remain at 2.6 percent.
During three months to January, industrial production remained flat with the prior three months and manufacturing output grew 0.4 percent.
In the quarterly economic forecast, the BCC estimated 0.7 percent GDP growth in the first quarter of this year.
The first increase in the key interest rate to 0.75 percent is expected no earlier than the first quarter of 2016, two quarters later than the BCC previously predicted.
For comments and feedback contact: editorial@rttnews.com
Economic News
What parts of the world are seeing the best (and worst) economic performances lately? Click here to check out our Econ Scorecard and find out! See up-to-the-moment rankings for the best and worst performers in GDP, unemployment rate, inflation and much more.
May 01, 2026 15:54 ET Central banks dominated the economics news flow this week with almost all major ones announcing their latest policy decisions and many boosted expectations for a rate hike in June. In other news, several countries released the preliminary data for first quarter economic growth. In the U.S., comments by Fed Chair Jerome Powell were also in focus as his term ends this month.