British Manufacturing Output Unexpectedly Drops In September

Britain's manufacturing output surprisingly declined in Sept., official data showed on Nov. 7, reinforcing market expectations that British interest rates would stay on hold later this week. Manufacturing output, which accounts for 80% of British industrial production, fell by 0.3% in Sept. from the previous month, National Statistics said.

Analysts' consensus forecast had been for a rise of 0.5% after August's decline.

Manufacturing output meanwhile fell by 0.8% in September, compared with a year earlier and market forecasts of a 0.2% drop. "Relatively subdued consumer spending, intense domestic and international competition and high input costs continue to dampen the potential for fireworks from the sector and it remains a long way from rocketing ahead," said Howard Archer, Global Insight's chief economist on Britain.

"The disappointing decline in manufacturing output is most unlikely to sway the Bank of England from leaving interest rates unchanged on Thursday," he added. The British cost of borrowing currently stands at 4.50%.

Copyright Agence France-Presse, 2005

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