UK manufacturing maintains growth

The UK manufacturing sector is improving from month to month

UK manufacturing output got another boost, rising more quickly than expected in June.

Output was up 0.2% on the month and 2.1% on the year, continuing a sharp rise in May, according to figures from the Office for National Statistics (ONS).

Manufacturing output was up 0.4% in May following a 0.1% decline in April.

The rise was largely due to strong demand in the electrical and optical equipment industries and in machinery.

The ONS said overall production, which includes the volatile energy sector, rose 0.1% month-on-month, to give a 2% increase on the year.

That compares with a 2.3% rise in May.

Sector on the mend

Analysts said the data was another indication that the UK industrial sector was on the mend.

The sector had been in the doldrums, largely as a result in sterling's strength, which had made UK goods more expensive abroad.

"The figures are stronger than market expectations. Coming off the back of a 0.5% rise in May, it may lead markets to wonder whether the worst is behind the manufacturing sector," said Philip Shaw, an Investec economist.

There were mixed feelings from analysts about how the Bank of England's interest rate-setting Monetary Policy Committee might react to the news.

"It confirms there has been some improvement in the industrial side of the economy over the second quarter and that, coupled with stronger service sector activity, I think argues for the need for caution for the MPC in the months ahead," said Adam Chester, economist at the Halifax.

However, other experts said that the rise in industrial output was unlikely to sway the UK central bank as its impact on overall economic growth is minimal.

The MPC left rates on hold at 6% at its meeting last week for the sixth month in a row.