UK industry finally stutters back to life

STERLING charged higher again last night after British industry clocked up its strongest performance for six months.

Figures from the Office for National Statistics showed industrial production increased by 0.5pc in March – the biggest rise since September last year.

Within industrial production, factory output was up 0.4pc and North Sea oil and gas production jumped 4.9pc.

Vicky Redwood, chief UK economist at Capital Economics, said the figures ‘tentatively suggest that the recovery in the sector is getting back on track’ after a disappointing start to the year.

The pound has been on the front foot since the Conservatives won an unexpected majority in the General Election last week.

Sterling rose as high as $1.5710 against the US dollar yesterday – a level not seen since mid-December.

However, industrial production increased by only 0.1pc in the first quarter of the year and output remains 8.5pc below its pre-recession peak. Factory output is still 4.8pc below crisis levels.

The sector has been held back in part by the strong pound pushing up the cost of British goods for foreign buyers. Chris Williamson, chief economist at Markit, said: ‘The overall picture remains one of a manufacturing economy that is struggling to expand.

‘The near-stagnation of the sector over the first quarter is a reminder of how little progress the UK has made rebalancing towards manufacturing.’

A report from the National Institute of Economic and Social Research estimated the economy grew by 0.4pc between February and April – slightly better than the 0.3pc rise in gross domestic product between January and March.