Belfast Telegraph

Boost in oil price fuels growth in UK production sector

By John-Paul Ford Rojas

The UK's production sector posted its strongest growth for six months in March, suggesting a slightly better start to the year for the economy than first feared.

The pound rose to a five-month high against the US dollar after official figures showed the sector grew by a better-than-expected 0.5%, boosted by a bounce from North Sea oil and gas.

Within production, manufacturing also beat forecasts with expansion of 0.4%, led by pharmaceuticals, while its performance in February was revised up too.

The figures from the Office for National Statistics (ONS) now show the production sector grew by 0.1% in the first quarter, compared to a previous estimate that it shrank by 0.1% over the period.

The ONS said this would have a "minimal" impact on recent figures showing that wider gross domestic product (GDP) growth slowed to 0.3% for the first three months of the year.

Vicky Redwood, chief UK economist at Capital Economics, said the data "tentatively suggest that the recovery in the sector is starting to get back on track", amid hopes that the wider upturn can be rebalanced.

"It does suggest that the industrial sector may have turned the corner," she said.

Belfast Telegraph