production fell sharply in January, official
figures showed Tuesday, raising fears that
the country will have its third recession
in not much more than four years.
The Office for National Statistics said
industrial production fell a monthly rate
of 1.2% from December, in contrast to
expectations for a 0.2% rise.
Industrial output includes manufacturing, as
well as sectors such as construction and oil
and gas production, and accounts for around
20% of the British economy, which is
Production on a seasonally adjusted
basis fell by 2.9% in January 2013
compared with January 2012;
manufacturing on a seasonally
adjusted basis fell by 3.0% in
January 2013 compared with
January 2012; production on a seasonally adjusted
basis fell by 1.2% between December
2012 and January
2013, mining & quarrying fell by
2.4% and manufacturing fell by 1.5%
sterling has been one of the worst
performing major currencies in 2013, having
fallen 8.5% against the dollar and 7.6%
against the euro. It fell to $1.4832, its
lowest since late June 2010, shortly after
The ONS said a main driver of the weak data was oil and gas extraction, which
fell 4.3% in January as the Schiehallion oil platform in the North Sea suspended
production while it undergoes building work. The oil platform, which accounts
for 3% to 6% of the UK's total oil production, is expected to be closed for up
to five years.
Oil and gas extraction has been one of the main
negatives for the U.K. economy in
recent months. The 0.3% contraction in gross domestic product (GDP) during the final
quarter of 2012 came about mainly because the Buzzard oil field, the North Sea's
largest, was closed for maintenance for much of that period, ONS data has
Overall industrial production, which includes manufacturing output as well as
mining and quarrying, electricity, gas and water supply, accounts for 15.6% of
the UK's gross domestic product.
German industrial production unexpectedly stagnated in January as
debt crisis weighed on company spending and investment.
Production was unchanged from December, when it rose 0.6%, the
ministry in Berlin said last week. December output was revised up from an initially
reported 0.3% increase. From a year earlier, production fell 1.3%
when adjusted for working days.
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