UK factory output falls

According to the Office for National Statistics (ONS), UK factory production has fallen by 0.8 percent between August and September which is the quickest pace since 1996.

It is now the seventh straight month that output has fallen as the Chartered Institute of Purchasing and Supply’s (CIPS) index of services dropped to 42.4, which is the lowest on record.

The continued decline is likely to result in a -0.5 percent fall in the GDP estimate, although more importantly, it is a further reason as to why the Bank of England needs to take action amid a large rate cut being expected tomorrow.

The ONS figures reveal that car manufacturing has taken the biggest hit over the last month, as both cars sales and parts are down both here and across Europe.

As well as the recession being experienced by the services industry, the manufacturing industry has not coped as well as analysts had hoped, with job losses heavy in both.

The outlook seems to be worsening as the CIPS manufacturing index is now at a 16-year low and with the property market still in crisis with no real hope of a quick fix, it seems inevitable that the bad times for UK manufacturing and construction will continue.

Compared to last year, factory production has fallen by 2.3 percent whilst output is down by 1.3 percent in the last quarter so the situation is worsening at a quicker pace.

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