Mild and stormy winter batters industrial production

According to the latest figures from the Office of National Statistics, released on Tuesday, industrial production fell by 0.7% in November 2015, although it grew by 0.9% from the same period in 2014.

December’s weather was as unseasonably mild as in November, when electricity and gas consumption sank 2.1 percent on a seasonally adjusted basis, the biggest monthly drop since April.

Britain’s makers disappointed across all sectors; however, the ONS singled out production of pharmaceutical items as a particularly hard-hit area in November, with output in that area falling by 4.9pc.

GBP/USD hit lows of 1.4484, the weakest level since June 2010, down from around 1.4527 ahead of the data. Sterling was also a cent lower against the euro at just under 1.33.

Tony Burke, trade union Unite’s assistant general secretary for manufacturing, said: “These figures are deeply worrying, and show that George Osborne’s promise to rebalance the economy is becoming an ever-distant pipe dream”.

Industrial production in the United Kingdom is having a pretty awful time of it right now.

Howard Archer, chief UK and European economist at IHS Global Insight, said the figures put a “significant dent” in hopes that UK GDP growth picked up in the fourth quarter of 2015. Producers are having to deal with a toxic combination of a historically strong exchange rate, weak global demand, intensifying competition, notably from the USA and continental Europe, as well as growing uncertainty about the outlook at home and overseas.

Mr Williamson argued that these factors were unlikely to recede soon, meaning that manufacturing would be likely to continue struggling this year, leaving “the economy worryingly unbalanced”.

This means there is little pressure on the Bank of England to raise interest rates from the rock-bottom low of 0.5%, despite the US Federal Reserve raising rates in America last month for the first time in almost a decade.