Strong pound hitting exports
The Office for National Statistics has revealed that overall production in the UK fell by 0.1% in January from the previous month, surprising analysts and fuelling concerns that the strong pound is lying heavy on exports. However, overall production is also estimated to have increased by 1.3% on the previous year. Manufacturing output was down by 0.5% in January from December, as fewer computer, electronic and optical products were made. The figure is at odds with a recent purchasing managers survey which revealed healthy new orders and hiring intentions in factories on the back of reduced cost pressures. Domestic demand has remained strong, but economists also believe things are picking up in the Eurozone. However, sterling's rise, which was up a further 0.5% against the euro yesterday to a seven-year high of €1.415, is proving worrisome for exporters.
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