U.K. manufacturing output rises in November, economy likely to have grown 0.4 pct in Q4

The data for U.K. released today provided a positive picture of the state of the economy during the end of 2017. The manufacturing sector of the U.K. saw another month of buoyant activity in November, recording a sequential rise of 0.4 percent. This is slightly above consensus expectations of a 0.3 percent rise and the seventh straight month of positive outturns. On a year-on-year basis, manufacturing sector saw a growth of 3.5 percent, leaving it on track to record a quarterly outturn of about 1 to 1.25 percent in the fourth quarter; a view echoed by the surveys of manufacturing confidence, not least the PMI.

The rises in manufacturing supported the growth in industrial production in November, underpinned by a 3.2 percent monthly rise in utilities output, which was driven by cooler temperatures. But oil and gas extraction reportedly contracted 2 percent in November, which tempered the overall rise in industrial output of 0.4 percent, noted Lloyds Bank in a research report.

In the meantime, construction output recorded its first growth in three months, rising 0.4 percent on a sequential basis. But the rise underwhelmed market projections of 0.4 percent. As a result the construction activity for the fourth quarter as a whole is expected to register a third consecutive quarter of negative output, stated Lloyds Bank. But with revisions to recent history for the sector now seen to be less negative, the annual pace of growth is now positive, although just modestly.

Still, as the industrial and construction sectors contribute around 20 percent to the total U.K. output, service sector output continues to be a more significant driver of overall growth.

“In line with the survey evidence, the UK looks on track to deliver growth of at least 0.4 percent in the fourth quarter”, added Lloyds Bank.

At 13:00 GMT the FxWirePro's Hourly Strength Index of British Pound was neutral -46.5202, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at 133.529. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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