Slowdown in Britain’s production

BRITAIN’S manufacturing and construction sectors contracted in March and the country’s trade deficit widened as the economy continues to falter.

Data from the Office for National Statistics (ONS) showed manufacturing output fell 0.6 per cent in March, construction dipped 0.7 per cent while industrial output as a whole slumped 0.5 per cent, its third straight monthly decline.

The figures, which fell short of expectations, point to a further slowdown in momentum for the UK economy following the country’s decision to quit the EU last year.

To compound matters, the UK’s total trade deficit in goods and services widened by £2.3bn between February and March to £4.9bn, contributing nearly half of the quarterly deficit, which also grew by £5.7bn to £10.5bn.

Sterling lost ground on the news, with the pound falling 0.1 per cent to 1.29 US dollars.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “March’s industrial production figures show that the pressure on consumers’ real incomes from rising inflation is beginning to hurt manufacturers.

“Industrial production has fallen for three consecutive months. With households’ real incomes set to come under further pressure from rising inflation, manufacturing output likely will grow only sluggishly ahead.”

On a quarterly basis, industrial output nudged up by 0.1 per cent and manufacturing growth slowed to 0.3 per cent.

However, the ONS added that the slew of poor figures implied no change to its preliminary estimate that the economy grew 0.3 per cent in the first quarter.