British industrial output rose the most in six months in July thanks to strong electricity and gas output, but the recent trend remains weak and the country’s trade deficit widened, official data showed yesterday

The Office for National Statistics said industrial output increased by 0.5 per cent in July after a 0.3 per cent rise in June, helped by a 3.6 per cent increase in electricity generation and the supply of gas, steam and air conditioning.

The rise in industrial output beat economists’ forecasts of an increase of 0.2 per cent.

Manufacturing output, a narrower measure, rose by 0.3 per cent, in line with forecasts.

But in the three months to July, industrial output fell by 0.1 per cent compared to the previous three-month period, its first drop in 18 months.

It is too early to get downbeat on the third quarter

Manufacturing in Britain is losing some of its momentum as the crisis in Ukraine further weakens demand in the eurozone, the destination for most British exports. A survey last week showed that growth in the sector hit a 14-month low in August.

Britain’s trade deficit in goods rose to £10.186 billion, above analyst forecasts of £9.1 billion and its highest since April 2012’s all-time record of £10.353 billion, the ONS said.

The deficit was aggravated in part by imports of aircraft, which have made the trade data volatile in recent months.

“The combination of these releases in isolation is not great news for growth,” said Alan Clarke, an economist at Scotiabank.

“But on the basis of the survey data, it is the services sector that should be expected to do all the heavy lifting in the second half [of the year] so it is too early to get downbeat on the third quarter,” he said.

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