The British pound rallied after better-than-expected U.K. industrial output data soothed some concerns about slowing economic growth.
Data released from the U.K. Office for National Statistics showed that manufacturing output rose more than expected in May, increasing 1.2 percent after a 0.7 percent drop in April. Industrial output rose by 1 percent from a previous 0.4 percent decline.
The increase was mainly helped by an extra working day in May due to a postponed public holiday. This allowed for more work, thereby increasing output. The ONS said a public holiday usually scheduled for the end of May was moved to June for the Queen’s Diamond Jubilee, for which yet another extra holiday had been added.
The statistics office said the May and June data should be treated “with caution.” The problem is that these two holidays will drag on June’s production figures, leaving little chance of showing an increase in output for the second quarter results.
Sterling erased losses against the dollar after the data was released at 08:30 GMT. GBPUSD rose to 1.5545 for the next 20 minutes after the data from where it was at 1.5511 before the data.