UK Manufacturing Drags GBP Down

The pound has fallen against the dollar and the euro after official figures showed UK manufacturing output fell by 1.5% in January from the month before.

The drop came after a 0.9% rise in output in December, and has added to fears of a third recession since 2008.

The pound hit a new two-and-a-half-year low of $1.4832 against the US dollar. The euro also rose to a two week high versus the pound of 87.77 pence.

Separate data showed the goods trade deficit shrank in January.

The Office for National Statistics said the goods trade deficit was £8.195bn in January from £8.738bn in December. The goods trade deficit with non-EU countries also narrowed to £3.280bn from £4.169bn the month before.

Both the trade deficit figures were at their lowest since July. However, while the trade gap is shrinking the figures show that total exports in goods decreased by £900m, or 3.5%, to £24.4bn, as total imports fell by £1.4bn or 4.2% to £32.6bn.

via BBC

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