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| Tuesday, 14 January, 2003, 13:21 GMT Sign of hope for manufacturers ![]() Machinery and equipment production led the way UK manufacturing output recorded a surprise rise in November, official figures have shown. The increase was the first for four months, and analysts said the move may ease pressure on the Bank of England to raise interest rates. Economists had predicted a fall in output, but the figures from the Office for National Statistics (ONS) showed it rose by 0.4%. The increase was driven by a 2.2% rise in machinery and equipment production, but the ONS noted that this was due to a rebound from a low level in October. The three-month figure for manufacturing output rose by 0.8% from the previous quarter, which the ONS said had been distorted by the effects of the Jubilee bank holiday. But the wider industrial production measure - which includes mining, gas and electricity output - fell by 0.5% in November. Interest rates Recent surveys of the manufacturing sector have suggested that UK industry remains mired in trouble. In December, employers' group the CBI warned that the manufacturing sector was on the brink of its second recession in as many years, as orders fell amid the global economic slowdown. And earlier this month, the latest snapshot of conditions from the Chartered Institute of Purchasing and Supply showed that the sector shrank in December. Last week the Bank of England kept interest rates on hold at 4.0%, for the 14th month in a row. But the depressed state of the manufacturing sector and signs of a possible slowdown in consumer spending have led to calls for a rate cut. However, economists said the new output data meant the chance of an early rate cut had receded. "The rise in manufacturing output will leave the Bank feeling comfortable," said Michael Hume, chief UK economist at Lehman Brothers. "I think they're going to be leaving rates where they are." |
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