LONDON: The UK economy ended the second quarter on a disappointing note as manufacturing stagnated and the trade deficit unexpectedly widened, figures published show.
Total industrial production rose 0.5% in June, more than economists forecast, but the gain was due to higher oil production as summer maintenance shutdowns failed to materialise.
Manufacturing was unchanged as production of vehicles plunged by 6.7%, the most since the end of 2013, according to the data from the Office for National Statistics. Construction output posted a surprise 0.1% decline in June and the trade deficit widened to a nine-month high of £4.6bil as exports slid and imports climbed. For the second quarter as a whole, industrial output fell 0.4%, unrevised from the estimate in last month’s GDP release. Construction declined 1.3% instead of 0.9%, reducing GDP by a negligible 0.01%.
The economy grew just 0.3% in the second quarter, half the pace of the euro region, and economists predict a similar expansion in the second half – weak enough for the Bank of England to keep interest rates at a record-low for now.
Separate trade figures showed the value of exports falling 0.7% in June, with shipments of goods alone dropping 2.8%.
Total imports rose by 3.3%. The deficit in the second quarter was little changed at £8.9bil, suggesting net trade made no contribution to growth in the period. — Bloomberg