Output rises for UK manufacturing

Demand for electronics has risen as the World Cup approaches

The UK's manufacturing sector has seen its most dramatic rise in output in almost a year.

The results were boosted by increases in transport and electrical equipment, according to figures published by the Office for National Statistics (ONS).

March saw manufacturing levels increase by 0.7%, significantly higher than February's figure of -0.1%.

Sales of electrical goods, such as televisions, have increased in the build-up to the World Cup.

Interest rate increase

The figures were well ahead of expectations, and represented the biggest month-on-month rise in manufacturing output since April 2005.

The growing evidence of significant recovery in the manufacturing sector will reinforce expectations that the next move in interest rates is up Howard Archer, Global Insight

"The growing evidence of significant recovery in the manufacturing sector will reinforce expectations that the next move in interest rates is up," said Howard Archer, an economist at Global Insight.

The broader measure of industrial production - which includes extractive industries such as mining, oil and gas, as well as power and water utilities was also up by 0.7%.

But on a year-by-year basis, oil and gas extraction and mining output dropped significantly, each falling by 8.5%.

The ONS said this was due to a general trend of decline in both industries, as extraction became harder and fewer gas and oil fields were discovered.

The ONS figures come a day after The Bank of England issued its quarterly inflation projections, indicating that the UK would reach its 2% inflation target, assuming interest rates were raised slightly.

Many analysts are now saying any change to the interest rate is likely to be upwards, though when remains uncertain.