Pace of recovery in manufacturing sector in doubt after shock figures reveal big decline in output
The pace of recovery in Britain's manufacturing sector was thrown into doubt after shock figures revealed a big decline in factory output.
The Office for National Statistics (ONS) said the sector slumped 1.3% in May against the previous month, the biggest fall since January 2013 and ending a six-month run of growth.
The figure compared with forecasts in the City for a rise of 0.4% and counters other recent surveys pointing to more strong growth for manufacturers.
Economists believe the figures may prove to be a blip, although they are also worried that the pound's recent surge to a near six-year high against the dollar and the continued woes of the eurozone may be hampering export progress.
The figures are also likely to serve as a warning to policymakers about the danger of raising interest rates too soon.
The Bank of England is due to announce its latest decision on rates tomorrow, with many experts expecting the first increase from the current record low of 0.5% before the end of this year.
The pound slipped back yesterday in the wake of the manufacturing figures.