The UK economy shows continued signs of contraction after a series of economic data today. Industrial production for the month of April came in worse than expected, showing zero growth from the previous month despite a 0.1 percent increase that was forecast. On a year-over-year basis, industrial production is down 1 percent since April 2011.
Meanwhile, factory production dropped 0.7 percent from the previous month , and manufacturing production was way below the -0.1 percent expected drop.
According to a report by the UK Office of National Statistics, the decline in UK output was driven by pharmaceuticals. The industry showed a drop of 6 percent in output in April. However, computer, electronic, and optical production were up 8.1 percent for the month.
The recent soft economic data that show that economic recovery is still sluggish increases speculation that the Bank of England may take steps to stimulate the economy. In its last policy meeting, the BOE did not add to its stimulus program and left the asset purchase target unchanged at 325 billion pounds.
Sterling fell to a low of $1.5453 after the data, gradually declining against the dollar ahead of the news, then bounced higher immediately after.