Strong pound pets UK manufacturing output

The momentum in the UK economy remains strong, but the manufacturing sector is struggling to benefit from this. Output fell by 0.4% mom in April and then by a further 0.6% in May. Analysts are worry that exports are being hurt by the strength of the pound. The business surveys are showing that export orders have weakened of late so this explanation seems highly plausible. 

If it is correct then further weakness in the months ahead is expected as the pound has continued to appreciate, says Societe Generale. 

The bank suggests, not to be fooled by the recent surprise fall in the trade in goods deficit. This was primarily the result of a fall in imports, which looks like an aberration, rather than by a rise in exports.