British factory output fell unexpectedly in September in its first annual decrease in a year and a half, data showed today.
The Office for National Statistics said manufacturing output fell 0.6 per cent on the month, compared with expectations of an unchanged reading, and the largest monthly fall since February.
On the year, factory output was down 0.1 per cent, against forecasts of a reading of 0.6 per cent growth, and this was the first annual fall since February 2006.
Sterling fell against dollar, and interest rate futures rose after the data, which came alongside a weaker-than-expected services sector survey, indicating that the economy is softening in the wake of higher interest rates and the credit crunch.
Most economists have said they expect the Bank of England to hold interest rates at 5.75 per cent on Thursday, but signs of weakening across the whole economy have raised the chances of a 25 basis point cut.
The economy grew at its fastest annual rate in more than three years in the third quarter, according to that initial estimate. The ONS said the electrical and opticals sector contributed most to industrial weakness in September