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UK data disappointing this morning

British manufacturing output fell unexpectedly in February, its first drop in almost a year, according to official figures that added to signs the economy may have slowed in the first quarter.

The data, released this morning along with figures for overseas trade, also showed another sharp drop in construction output, defying expectations for a small rebound after a severe downturn in January.

The pace of economic growth slowed slightly in 2017 as higher inflation caused by the fall in sterling after the Brexit vote hurt consumers, although some exporters have gained from the weaker pound and the stronger eurozone economy.

Overall, today’s data mostly were In line with business surveys that suggest Britain’s economy cooled further in early 2018, weighed down in part by snowstorms in late February and early March.

The subdued output figures will be of interest to Bank of England officials who are widely expected to raise interest rates next month.

In February the central bank raised its growth forecasts for Britain due to the improving global economy and said interest rates were likely to rise faster and to a greater extent than it expected in late 2017.

Britain’s goods trade deficit with the rest of the world narrowed to 10.203 billion pounds in February from 12.228 percent in January – the smallest gap since September and better than all forecasts in the poll that had pointed to a deficit of 11.95 billion pounds.

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