September 9, 2014 / 8:55 AM / 5 years ago

UK July industrial output shows biggest rise in six months

LONDON (Reuters) - British industrial output rose the most in six months in July thanks to strong electricity and gas output, but the recent trend remains weak and the country’s trade deficit widened, official data showed on Tuesday.

One of the blast furnaces of the Tata Steel plant is seen at sunset in Port Talbot, South Wales May 31, 2013. REUTERS/Rebecca Naden

The Office for National Statistics said industrial output increased by 0.5 percent in July after a 0.3 percent rise in June, helped by a 3.6 percent increase in electricity generation and the supply of gas, steam and air conditioning.

The rise in industrial output beat economists’ forecasts of an increase of 0.2 percent.

Manufacturing output, a narrower measure, rose by 0.3 percent, in line with forecasts.

But in the three months to July, industrial output fell by 0.1 percent compared to the previous three-month period, its first drop in 18 months.

Manufacturing in Britain is losing some of its momentum as the crisis in Ukraine further weakens demand in the euro zone, the destination for most British exports. A survey last week showed that growth in the sector hit a 14-month low in August.

Britain’s trade deficit in goods rose to 10.186 billion pounds, above analyst forecasts of 9.1 billion and its highest since April 2012’s all-time record of 10.353 billion pounds, the ONS said.

The deficit was aggravated in part by imports of aircraft, which have made the trade data volatile in recent months.

“The combination of these releases in isolation is not great news for growth,” said Alan Clarke, an economist at Scotiabank.

“But on the basis of the survey data, it is the services sector that should be expected to do all the heavy lifting in the second half (of the year) so it is too early to get downbeat on the third quarter,” he said.

UK industrial production link.reuters.com/nep78t

UK trade balance vs pound link.reuters.com/vuv28v

UK trade balance since 1970 link.reuters.com/tet78s

Reporting by David Milliken and Andy Bruce; additional reporting by William Schomberg; Editing by Hugh Lawson

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