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BCC: Manufacturing Decline Reinforces Need for MPC to Delay Rates Rise

  • Manufacturing output in July 2015 was -0.8% on the month and -0.5% on the year
  • Total industrial production in July 2015 was -0.4% on the month and up 0.8% on the year

Commenting on the Index of Production Figures for July 2015 issued today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce, said:

“It is disappointing that both manufacturing and total industrial output have recorded falls in July 2015. While it is important to remember that monthly figures can be volatile and erratic, longer term trends also show very weak growth.

“The manufacturing sector is facing many headwinds, particularly difficult global circumstances. Eurozone growth, although edging up slightly, still remains weak, while outside Europe there are growing problems facing China and other emerging markets.

“Sterling’s relative strength, particularly against the euro, is an added challenge for many of our manufacturing exporters. Today’s figures are a stark reminder that the MPC must remain cautious and reject any suggestion for early interest rate increases. At a time when major international organisations such as the IMF and World Bank are warning against putting up rates, it would be premature and risky for the UK to consider such a step.”

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