UK November Industrial Production Rises 2.1%, Markets Unconvinced By Recovery

UK industrial production rose 2.1% in November following a revised 1.1% decline the previous month, which was originally reported as a 1.3% decline. This increase was significantly stronger than the consensus expectations of a 0.8% gain and the largest monthly gain for seven months.

Manufacturing production increased 1.3% for the month following a revised 1.0% decline the previous month.

Within the manufacturing sector, there was a strong 11.4% rebound in the pharmaceutical sector after the sharp decline seen for October and this sector is notoriously volatile on a monthly basis.

There was a strong recovery for oil and gas extraction on the month due to the completion of maintenance-related shutdowns in the oil sector as the Buzzard field came back into production. There was also a positive contribution from power generation due to colder than normal weather.

On a year-on-year basis, there was a 2.0% gain in industrial production with manufacturing registering a gain of 1.2% with all major sectors in positive territory for the year.

The data will provide immediate relief surrounding the industrial trends, although much of the improvement was due to special factors and followed a notably weak report the previous month. The October and November data will tend to cancel each other out, although there are some grounds for cautious optimism.

There will need to be a sustained improvement in manufacturing over the next few months to boost underlying confidence in the outlook.

Sterling ticked higher immediately after the release, but was unable to sustain the gains, especially with a weak release for trade. EUR/GBP rallied back towards 0.8700, while GBP/USD declined to lows near 1.2110. Gilts dipped back into negative territory, although losses were limited, while the FTSE index continued to advance.


Tim is a contributing author to He is an economist and has been involved in financial markets for over 20 years as an analyst. He specialises in global economic trends, macro policy and central banks. Extensive knowledge, experience and data mining is used to anticipate trends in equities, bonds and forex with a contrarian slant. He is a graduate of the University of York with a degree in Economics/Econometrics.