Industrial output rises at fastest since July 2002

LONDON (Reuters) - Manufacturing output rose faster than expected in September, and at its fastest monthly pace since July 2002, rebounding from August's sharp drop, official data showed on Thursday.

The Office for National Statistics said that factory output rose by 1.7 percent in September, increasing from a 2.0 percent decline in August. September's outcome was much higher than economists' forecasts of a 1.0 percent and the strongest gain since July 2002.

The figures come just hours before the Bank of England will announce whether it will expand its 175 billion pound quantitative easing programme, and add to the raft of conflicting data about the British economy over the past month.

The ONS said that 10 of the 13 manufacturing sub-sectors posted gains in September, with electrical and optical equipment, transport equipment and other manufacturing recording the strongest increases.

The wider industrial measure, which includes power generation and natural resource extraction, rose 1.6 percent in September, again the strongest rise since July 2002 and beating forecasts for an increase of 1.0 percent.

The ONS said the increases came after factories reopened following an August break which had depressed output in that month.

Year on year, manufacturing output fell 9.3 percent and industrial output was 10.3 percent lower.

In the three months to September, industrial output dropped 0.8 percent -- roughly in line with the 0.7 percent estimate used in last month's preliminary Q3 GDP data. The ONS this would not materially affect the GDP estimate for the quarter, all other things being equal.