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Last Updated: Thursday, 9 March 2006, 10:38 GMT
Recovery hopes for manufacturers
Production line at BMW's Mini factory in Cowley
Manufacturing output is bouncing back gradually
UK manufacturing output rose for the third month running in January, up 0.2%, fuelling hopes that the sector is in a state of sustained recovery.

However, manufacturing dipped 0.2% in the three months to January compared with the previous quarter, said the Office for National Statistics (ONS).

But overall industrial production beat forecasts with a 0.4% increase in January, twice the 0.2% expected.

Mining firms were particularly active, while energy firms' output decreased.

On a three-monthly basis, industrial production rose by 0.3%.

The figures are not expected to influence the Bank of England's decision on interest rates, due at midday on Thursday.

"These figures are very encouraging and suggest manufacturing is beginning to benefit from a strengthening in the eurozone economies," said Philip Shaw, chief economist at Investec.

Oil imports up

Separately, the UK's deficit on goods and services was unchanged at 3.8bn in January.

The deficit on trade in just goods was 5.7bn as the oil balance swung back into the red after a surge in oil imports.

The UK has traditionally been a net oil exporter because of its North Sea fields, but last year saw its first annual deficit in oil since 1979.

Exports of consumer goods other than cars and aircraft fell in January, the ONS said, while exports of capital goods rose.

This deficit was 0.4bn less than December's.

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