Factories braced for tough winter

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BRITAIN’S FACTORIES saw output ease back in October in the latest sign that the manufacturing sector is set to endure a tough winter.

Official figures revealed that manufacturing output dropped by 0.4 per cent month-on-month in October - worse than expected and a sharp reversal of the 0.9 per cent rise in September.

The Office for National Statistics (ONS) said activity in the sector was also down on an annual basis, falling by 0.1 per cent.

The figures come after manufacturing industry group the EEF said on Monday that manufacturers were enduring a “difficult end” to a tough year amid mounting gloom over the global economy.

And last week’s CIPS/Markit purchasing managers’ index (PMI) survey came as a disappointment, showing a reading of 52.7 in November, down from 55.2 the previous month.

The data comes ahead of the Bank of England’s monthly decision on interest rates on Thursday, with policymakers expected to hold the cost of borrowing at 0.5 per cent once again.

David Kern, British Chambers of Commerce chief economist, said: “It is disappointing that manufacturing has again declined, following an improvement the previous month.

“There are still major challenges facing the sector, particularly in the face of worsening global circumstances and the strength of sterling.”

But Martin Beck, senior economic adviser to the EY ITEM Club, said growth in the powerhouse services sector should help support a pick-up in the overall economy in the fourth quarter.