UK manufacturing output falls 0.7% in October

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UK manufacturing output unexpectedly fell 0.7% in October, down from revised growth of 0.7% in September, according to official figures.

Economists had forecast a 0.2% increase in industrial and manufacturing output in October.

The Office for National Statistics (ONS) said output was hit by a sharp fall in computer and electronics manufacturing.

Compared with a year earlier, output from manufacturing was up 1.7%.

The monthly decline, which was the biggest since May, was hit by a 4.5% fall in computer, electronic and optical products.

'Timely reminder'

Pharmaceutical and chemical goods also weighed on the factory sector, the ONS said.

"A sharp drop in factory output in October is a timely reminder that policymakers cannot be complacent about the UK's recent run of strong growth persisting into the New Year," said Chris Williamson, chief economist for financial information firm Markit.

"Expectations of when [the] UK interest rate may start rising will most likely be pushed back with the news that the manufacturing economy is struggling once again, and that the economic upturn remains all too dependent on domestic spending."

The Bank of England has signalled it will keep interest rates low well into 2015 as earnings struggle to grow more than inflation.

Manufacturing still has further to go to catch up on its deep slump after the 2008 financial crisis. Factory output is still 5.5% below its peak, while the services sector output is already well above its pre-crisis peak.

However, a business survey last week indicated that UK manufacturing activity increased in November, compared with October, after solid domestic demand offset weaker orders from overseas markets.

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