This morning we saw British industrial output grow in January following a sharp fall in December, helped by a stronger than expected upturn in manufacturing. Manufacturing output also rose by 0.7% month-on-month in January. This was much better than expected following a drop in December, a first increase for fourth months. The UK industrial output rose by 0.3 per cent month-on-month in January, although that was weaker than expected. GBP/USD is trading higher on the back of this data.
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Mark Stephenson, UK manufacturing industry leader at Deloitte said that “The challenges UK manufacturers are up against should not be underestimated. Slow global economic growth, weak Chinese trade data, downgraded UK growth forecasts, turmoil in the steel industry and the PMI at its lowest point for almost three years, are just some of the factors at play. Therefore today’s manufacturing output figures show how resilient the industry is and signals the prospect of a more positive year ahead for UK manufacturers.”
The focus turns to the BoC Interest rate decision at 15:00 GMT and is widely expected to keep interest rates unchanged at 0.50%. The present consensus is that the BoC is unlikely to hike the rate anytime soon. In some cases, economists actually see a rate cut on the horizon in 2016 with over a third of surveyed Bloomberg economists predicting this outcome.
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