U.K. industrial production rose more than economists forecast in July, indicating momentum in the recovery was sustained into the start of the third quarter.
Output increased 0.5 percent from June, the most in five months, the Office for National Statistics said in London today. The median forecast of 28 economists in a Bloomberg News survey was for a gain of 0.2 percent. From a year earlier, production rose 1.7 percent, an 11th consecutive increase.
After expanding 0.8 percent in the second quarter, Britain’s economy has shown some signs of moderating in the past month, with a factory index by Markit Economics falling to the lowest in more than a year. Part of the drag on the recovery relates to the euro-area, where economic growth stalled in the second quarter.
The Bank of England held its key interest rate at a record-low 0.5 percent last week. While two of its nine-member committee voted to raise the rate in August, the majority said economic circumstances didn’t justify tightening yet.
The increase in U.K. production in July was led by electricity and gas, which surged 3.6 percent on the month. Manufacturing output rose 0.3 percent in July from June, matching the median forecast of economists, and was up 2.2 percent from a year earlier.
The pound was little changed against the dollar and traded at $1.6097 as of 9:34 a.m. London time.
In a separate report, the ONS said Britain’s goods-trade deficit widened to 10.2 billion pounds ($16.4 billion) in July from 9.4 billion pounds in June. That’s’ the biggest since April 2012. Exports rose 2.1 percent in July from the previous month and imports increased 3.9 percent.
There was a surplus on services of 6.84 billion pounds, leaving a total trade gap of 3.35 billion pounds, the widest since September.
There were no revisions to the June trade or production numbers as the statistics office is preparing to publish revisions to its data as far back as 1997 later this month.