Tuesday 28 January 2020

UK economic output halved in first three months of 2016

Chancellor George Osborne warns of a ‘cocktail of risks’. Photo: Reuters
Chancellor George Osborne warns of a ‘cocktail of risks’. Photo: Reuters

David Milliken and  Ana Nicolaci da Costa

Britain's industrial output shrank at the fastest rate in more than three years in the three months to February and the trade deficit ballooned to its widest in eight years, data showed yesterday.

The figures add to worries of a broader economic slowdown in Ireland's key trading partner.

Chancellor George Osborne warned at the start of the year that the economy faced a "cocktail of risks" due to spillover from a slowdown in China and a slump in commodity prices.

There are also jitters in Britain in the run-up to the June 23 referendum on whether to leave the European Union.

Some of these dangers now appear to be materialising, with industrial output - which makes up 15pc of Britain's economy - shrinking by 1.5pc in the three months to February, its steepest decline since late 2012.

"Today's release is disappointing and paints a dire picture of manufacturing in the UK," HSBC economist Simon Wells said yesterday. Sterling fell versus the dollar after the data and the EEF, a trade body for British manufacturers, said the latest data pointed to a "fairly dismal" first quarter.

Britain's NIESR research institute estimated after the data that overall economic growth in the first three months of 2016 had almost halved to just 0.3pc, the weakest since the end of 2012.

The Office for National Statistics said factory output fell sharply on the month and the year, driven by lower production of cars, machinery, chemicals and clothes, and bucking Reuters poll forecasts for it to stay broadly stable.

Steel production, in the headlines after India's Tata Steel put Britain's biggest steelworks up for sale, sank to its lowest in more than seven years.

Over the same three months, the country's trade deficit in goods and services reached its widest since March 2008. (Reuters)

Irish Independent

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