UK DATA: Jan manufacturing output -0.9% m/m; +0.2% y/y
–Jan industrial production -0.4% m/m; -1.5% y/y
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Manufacturing output fell sharply in Jan by 0.9% m/m against
expectations for a rise of 0.3%. NS said there was some anecdotal
evidence from manufacturers that the cold weather had hit production
with 11 out of the 13 manufacturing sub-sectors posting falls. Although
NS also added that some manufacturers has brought forward output to Dec
ahead of the VAT rise. The wider measure of industrial production was
down by less, a fall of 0.4% m/m, as the cold weather boosted utilities
output. Overall, while the weather may have hit output this is a very
disappointing start to the year for manufacturers and unless we see a
strong bounceback could mean we see the sector posting negative growth
in Q1. If the services sector has also taken a similar hit from the
weather then GDP could easily turn negative again.