U.K. Industrial Output Rises Most Since 2011

U.K. industrial production rose for a third month in April, driving the annual increase to the biggest since 2011.

Output rose 0.4 percent from March, when it gained a revised 0.1 percent, the Office for National Statistics said today in London. That matched the median of 29 estimates in a Bloomberg survey. From a year earlier, output surged 3 percent.

Industry surveys indicate the economy continued to expand this quarter, with Markit Economics saying last week that its gauges show Britain is on track to grow 0.8 percent. Some Bank of England officials have said their decision to keep the benchmark interest rate at a record-low 0.5 percent is becoming “more balanced” as the recovery gathers pace.

The annual gain in production would have been even bigger were it not for a sharp drop in electricity and gas output. While that rose 3.7 percent on the month, it was down 11.5 percent from a year earlier. The annual drop was partly related to warmer weather this year and knocked about 1 percentage point from industrial production.

Manufacturing rose 0.4 percent in April from March and increased 4.4 percent from a year earlier. Factory output has now risen for five consecutive months, the longest streak of gains since 2010. Within manufacturing, the gain on the month was led by transport equipment, computers and electronics.

“This is a solid start to the second quarter,” said David Tinsley, an economist at BNP Paribas SA in London. “If manufacturing production went sideways in May and June it would still be up 1.1 percent over the quarter. And all survey evidence suggests a better performance than that is possible.”

Winning Streak

The pound gained 0.3 percent to 80.69 pence per euro at 10:43 a.m. London time. Sterling was little changed at $1.6801.

In the three months through April, production rose 1.1 percent compared with the previous three months, the statistics office said. That’s the biggest increase since June 2010 and marked a 15th consecutive advance.

While Britain’s economy has strengthened over the past year, today’s data showed industrial output remains 11.3 percent below where it was when GDP peaked in the first quarter of 2008, while manufacturing is 7 percent lower.

The U.K. Treasury in London said today’s data is “further evidence that the government’s long-term economic plan is working.”

“The job is not done, but the greatest risk to the recovery would be abandoning the plan that’s delivering a brighter economic future for Britain,” it said in a statement.

(Source: Bloomberg)