UK Production Falls 1.5%; Output Price Inflation Falls to 5.3%

Arthi Gupta
10 Jun, 2011
New York City

The UK indexes declined after industrial production fell more than estimated and manufacturing output dropped in April. The UK output price inflation slowed to 5.3% annually in May. Irish manufacturing output improved in April.

[R]3:30 PM London – The UK indexes declined after industrial production fell more than estimated and manufacturing output dropped in April. The UK output price inflation slowed to 5.3% annually in May. Irish manufacturing output improved in April.[/R]

In London, FTSE 100 Index declined 38.21 or 0.61% to 5,818.29 and the pound edged lower to $1.6306. For the week, the FTSE 100 Index dropped 0.61%.

UK Industrial Production Falls

UK industrial output fell more than estimated in April due to extra public holidays and supply chain disruptions caused by the Japanese earthquake and tsunami, official data showed today.

The index of industrial production dropped 1.7% on a monthly basis in April compared to an increase of 0.2% in March, according to data published by the Office for National Statistics.

Annually, overall industrial production declined 1.2% in April, reversing 0.1% increase in March.

UK manufacturing output fell 1.5% in April after rising 0.2% in March, according to data published by the Office for National Statistics.

On an annual comparison, manufacturing output grew 1.3%, slower than the 2.2% expansion seen in March.

UK Output Price Inflation Slows

UK output price inflation slowed to 5.3% on a yearly basis in May from 5.5% in April, the Office for National Statistics said.

On a monthly basis, the output price index climbed 0.2% in May, mainly reflecting price rises in food and other manufactured products, following a 1% growth registered in April.

In another report, Britons'' inflation expectations for the year ahead eased slightly in May, a survey by the Bank of England and GfK NOP showed today.

Consumers'' one-year ahead inflation expectations slowed to 3.9% in May from 4% in February. Respondents forecast inflation to slow to 3.2% during twelve months after next year compared to 3.4% expected in the previous survey period.

Irish Manufacturing Production Up

Ireland''s manufacturing production rose a seasonally adjusted 4% annually in April, recovering from the 2.2% contraction recorded in March, which was revised up from 5.5%, preliminary data from the Central Statistics Office showed.

On a monthly basis, industrial output rose a seasonally adjusted 2.2% in April, reversing the 1.8% decrease in March, which was revised down from the previously reported 1.3% fall.

Gainers & Losers

Bellway Plc soared 3.16% to 719 pence after the residential property developer said it achieved a sales rate of 111 units per week in the four-month period from February 1 to May 31, up 9% on the same period last year, from an average of 195 sites.

Cineworld Group plc fell 2.71% to 197.75 pence after the investment holding company said Richard Jones will be resigning from his position as Chief Financial Officer. He is also stepping down as a director from the company''s board.

Petrofac Limited dropped 0.71% to 1,533.00 pence after the oil and gas facilities provider acquired an additional 11.9% stake in Nigerian production and development firm Seven Energy International for $75 million.

Rio Tinto Ltd. declined 1.05% to 4,155.50 pence after the mining and resources group said it is testing new techniques for underground tunneling, mineral exploration and improved recovery of ore in its latest push to develop competitive advantage through its Mine of the Future program.

Vallar Plc dipped 0.21% to 1,200.00 pence after the mining investment company announced a reorganization through transfer of 75% of PT Bumi Resources Minerals Tbk to Vallar and the increase of its ownership in PT Bumi Resources Tbk.