LONDON (AFP) - Britain's manufacturing industries experienced an unexpected drop in output in August, the first time since January 2002 that output has fallen for three months in a row.
Manufacturing output dropped by 0.8 percent in August from July, the National Statistics office said Wednesday. Analysts had expected a rise of a 0.3 percent.
It was the biggest monthly decline since October 2002, when output slid by 1.3 percent.
Meanwhile the wider measure of industrial production, which also includes utilities and mining output, fell also by 0.8 percent in August from the previous month.
On a year-on-year basis, industrial production was 0.1 percent lower.
"The sharp 0.8-percent fall in manufacturing output in August, following on from earlier drops in both July and June, confirms that the sector's recovery is faltering amid higher interest rates, slowing global growth and strong oil price," said Howard Archer, an analyst at Global Insight, an independent consultancy.
A spokesman for National Statistics cited three main reasons for the monthly decline in manufacturing output. These were a 3.8-percent decrease in transport equipment industries, a 2.7-percent decline in electrical and optical equipment and a 3.3-percent fall in machinery and equipment.
British manufacturers, struggling to recover from several tough years due to a strong pound, a global economic slowdown and stiff competition from low-cost producers such as China, should take some comfort from the fact that the Bank of England looked certain to keep interest rates on hold on Thursday.
British borrowing costs currently stand at 4.75 percent after five quarter-point hikes since November.