Cars boost factory output

FACTORIES pumping out new cars during July made the UK’S manufacturing sector a bright spot during a month that otherwise showed little sign of growth.

Manufacturers grew output by 0.5pc during the month, the Office for National Statistics (ONS) said, following a 13.7pc pick-up in new cars and trailers being made – the highest in more than eight years.

“Manufacturing remains relatively subdued since the start of the year, though July showed the first significant monthly growth of 2017, with car production increasing partly thanks to new models rolling off the production lines,” said Kate Davies, senior ONS statistician. However, the data showed little signs of improvement elsewhere, with construction output dropping as housebuilding slowed.

Britain’s total trade deficit for goods and services also remained unchanged at £2.9bn, with a boost in goods exported to the EU offset by a fall in exports to the rest of the world.

A separate study yesterday added to the downbeat view, with the British Chambers of Commerce (BCC) warning that the economy is “treading water” ahead of Brexit, downgrading its forecast for growth over the next few years. “It is increasingly clear that the post-eu referendum slide in the value of sterling has done more harm than good,” Suren Thiru, the BCC’S head of economics, warned. “Inflation is being driven by the sizeable increases in the cost of imported raw materials.”