Latest production figures cast doubt over economic recovery

The figures cast doubt on whether the economy will find its stride again after nine months of almost zero growth and a darkening international outlook that has tipped the Bank of England towards considering further monetary stimulus.

The Office for National Statistics said industrial output shrank by 0.2 per cent in July after a flat reading in June, below analysts’ forecasts for another month of stagnation.

There was little reaction to the data, which confirmed economists’ downbeat views on the nation’s economic prospects.

The fall in output was mainly due to a 1.5 per cent drop in oil and gas production, which the ONS said was due to unusually prolonged maintenance on North Sea Oil rigs.

“Rigs are getting older so maintenance could be taking longer,” an ONS statistician said. These weaker oil and gas figures helped to offset a 0.1 per cent rise in manufacturing output, which was a shade better than economists had forecast and up from a 0.4 per cent fall in June. But there were no revisions to the June data that could alter the mediocre 0.2 per cent GDP growth recorded in the second quarter.