British Industry stuck in the doldrums
Tuesday 12 March 1996
British industry has been stuck in the doldrums since the new year. Industrial output declined in January while the rise in prices at the factory gate last month was surprisingly small.
With a separate survey suggesting that retail sales growth slowed a little in the year to February, yesterday's batch of statistics helped restore calm to the financial markets and encouraged economists who thought last week's reduction in the cost of borrowing was justified.
``The Chancellor is likely to feel fully vindicated by his decision to cut base rates,'' said David Walton at the investment bank Goldman Sachs.
However, most City analysts said there was no prospect of another cut in the short term as long as the financial markets remained unsettled. Others think there is a danger of greater inflationary pressure later in the year.
``The end of the period of base rate cuts is approaching,'' Mr Walton said. Indicators such as growth of the money supply measures and house prices raised questions about the inflation outlook, he said.
However, yesterday's figures showed that the trend in industrial output remained subdued in January. It fell 0.5 per cent in January due to lower output of energy and weaker North Sea gas extraction, the result of a one-degree improvement in the average temp-
erature for the month.
Production was flat in the three months to January, and only 1.7 per cent higher than a year earlier.
Manufacturing output regained the same level as its mid-1990 peak in January. It rose 0.3 per cent during the month, partially reversing a 0.8 per cent fall in December. But it was 0.6 per cent lower in the three months to January than the previous three months, and up only 0.5 per cent in the year.
Manufacturing was weak across the board during the latest three-month period. The only area of strength was output of durable goods - consistent with surveys which have shown sales of goods such as furniture and carpets starting to climb.
``The trend in manufacturing output remains chronically weak, with little prospect of a near-term recovery,'' said Adam Cole, UK economist at brokers James Capel.
A further sign of weakness in industry was a smaller-than-expected rise last month in both manufacturers' materials costs and prices charged at the factory gate.
Input prices fell for the second month, down 0.3 per cent on a seasonally adjusted basis. They rose 3 per cent in the year to February, the slowest rate of growth since June 1994. Their level has fallen by nearly 2 per cent during the past six months.
New UK station Russia Today gives a very bizarre view of Britain
By performing as African Americans or Indians, white people get to play act a kind of 'imaginary liberation', writes Michael Mark Cohen
Top Gear presenter is no stranger to foot-in-mouth controversy
New essay by JK Rowling went live on Pottermore site this morning
Review: Mike Leigh's biopic is a rambling, rich character study
- 1 'Nasa Confirms Six Days of Darkness in December': No, they don't - it's a hoax
- 2 Canadian actor punched in face after 'Islamophobia' experiment goes wrong in wake of Ottawa shooting
- 3 Topshop at centre of row over body image as 'shocking' skinny mannequin photo goes viral
- 4 If you think Russell Brand’s new book is confused, you should read what his critics have to say about it
- 5 Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
'Nasa Confirms Six Days of Darkness in December': No, they don't - it's a hoax
Canadian actor punched in face after 'Islamophobia' experiment goes wrong in wake of Ottawa shooting
Halloween 2014: From the Screaming Man of Pluckley to the 'White Lady' of the Tower of London - Britain's 20 most haunted places
Russian politician says Apple CEO Tim Cook should be 'banned' from country after coming out as gay
Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
Pope Francis declares evolution and Big Bang theory are real and God is not 'a magician with a magic wand'
Huge surge in Ukip support after EU funding row, according to new poll
Ukip ‘exploiting grooming scandal’ to secure party’s first police chief
Nigel Farage: 'There’s nothing wrong with white people blacking up'
Maureen Lipman says 'she can't vote Labour while Ed Miliband is leader'
Muslims, immigration and teenage pregnancy: British people are ignorant about almost everything
iJobs Money & Business
£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...
£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...
£20000 - £23250 Per Annum pro rata: Clearwater People Solutions Ltd: Pro rata ...
£40 - 48k + Benefits: Guru Careers: We are seeking a Marketing Manager to join...