A damper was put on rapid recovery hopes today with disappointing industrial production figures and a widening of Britain’s stubbornly high trade deficit in July.
Industrial output was flat over the month after a healthy 1.1% expansion in June. Economists had expected production to edge up slightly. The trade in goods deficit rose to £9.8 billion, considerably larger than City traders’ forecasts of £8.15 billion.
The monthly gap was higher than the £7.3 billion deficit recorded in July 2012. There were also signs of problems in emerging markets beginning to affect British firms, with exports to non-European countries plunging by almost 16%.
“The larger-than-anticipated increase in the trade deficit is a reminder of the obstacles facing the UK economy as it starts to recover” David Kern of the British Chambers of Commerce said.
Manufacturing output expanded by 0.2% after a 1.9% surge in June.
