U.K. Industrial Output Grew Only Modestly In July

U.K. manufacturing picked up in July, official figures showed Friday, but overall industrial output fell short of analysts' expectations, suggesting that the economy rebounded only moderately as it entered the third quarter.

Factory output grew by 0.5% on the month in July--the first monthly increase this year--partly thanks to new car models rolling off production lines, the Office for National Statistics said.

The monthly growth exceeded the expectations of economists polled by The Wall Street Journal, who forecast a 0.3% expansion. Compared with the same month last year, manufacturing grew by 1.9%, also above forecast.

However, overall industrial production grew only modestly in July, by 0.2% on the month, falling short of market expectations of a 0.4% growth.

Separately, the ONS said the U.K.'s July goods trade deficit stood at GBP11.6 billion ($15.16 billion), close to the previous month's revised figure of GBP11.5 billion, as a fall in exports outside the European Union offset an increase in exports to EU countries.

As accelerating inflation squeezes consumer spending--a key engine of U.K. growth--economists say that production and trade will have to do more heavy lifting to stave off the already-evident economic slowdown.

Official estimates showed that the economy grew by 0.3% in the three months through June, largely thanks to a warm summer which encouraged shoppers to go out and spend.

Second-quarter economic growth was above the 0.2% growth seen in the preceding three months, but still only less than a half of the 0.7% expansion seen at the end of last year.

Write to Wiktor Szary at Wiktor.Szary@wsj.com and Jason Douglas at Jason.Douglas@wsj.com

(END) Dow Jones Newswires

September 08, 2017 05:03 ET (09:03 GMT)