UK Industrial Output Growth Slows In July

New homes being constructed

The sector expanded by 0.5%, driven in part by the production of new cars, official data from the Office for National Statistics showed.

Auto production grew at the fastest rate since March 2009 at 13.7 per cent.

The Office for National Statistics said that manufacturing rose 0.5 per cent in July, its first monthly growth this year, buoyed by increasing auto production with new models.

There was disappointing news on construction, however, where output fell 0.9 percent, below all economists' forecasts polled by Reuters.

The trade deficit in goods and services in July was unchanged at £2.872 billion, while Britain's trade in goods deficit with the rest of the world widened slightly to £11.567 billion.

Exports of goods to the European Union increased but this was offset by falling goods exports to the rest of the world.

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Overall industrial production rose by 0.2% in July, after a 0.5% increase in June.

United Kingdom manufacturing output is proving stronger than expected, official figures confirmed on Friday, as export and import prices for goods fell as the pound strengthened slightly.

However the data showed little signs of improvement elsewhere, with construction output dropping as housebuilding slowed.

The stronger-than-expected manufacturing output growth in July boosted the pound against the dollar by 0.76% to $1.32.

But Ruth Gregory, of Capital Economics, said: "Looking ahead, the surveys suggest that both manufacturing and export growth should pick up further, while the consumer slowdown should weigh on import volumes".

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