U.K. industrial production shrank in March, data showed Thursday, as manufacturing output declined unexpectedly and unseasonably warm temperatures reduced demand for electricity and gas.
In monthly terms, industrial production shrank 0.5% in March, the Office for National Statistics said. This was a slightly slower pace of decline than forecast in a Wall Street Journal poll. Compared with the same month last year, industrial output was up 1.4%, missing market expectations of 1.9% growth.
Meanwhile, factory output declined by 0.6%, disappointing analysts' expectations of no monthly change. Annual growth in manufacturing also disappointed, with factory output growing by 2.3%, 0.2 point less than forecast.
ONS data also showed that U.K. total trade deficit with the world widened sharply in March, as imports of machinery, transport equipment, oil and chemicals grew strongly.
This meant that Britain's total trade deficit widened by GBP5.7 billion in the first three months of the year, to GBP10.5 billion, with March's deficit accounting for nearly half of the quarterly figure.
As accelerating inflation squeezes consumer spending--for years a key engine of U.K. growth--economists say that production and trade will have to make a bigger contribution to stave off an economic slowdown.
The U.K. economy slowed sharply in the first quarter as consumers pared back spending, a warning sign on growth ahead of a national election in June and the start of Britain's exit talks with the European Union.
Write to Wiktor Szary at Wiktor.Szary@wsj.com
(END) Dow Jones Newswires
May 11, 2017 05:04 ET (09:04 GMT)