The UK Manufacturing Production index came out much lower than expected on a month to month basis, declining by 1.2% compared to a previous 0.5% growth. The forecast was for a 0.4% increase. Year on year, the index also came out lower at 4.9% versus the previous year’s 6.6%. Meanwhile, Industrial Production also dropped by 1.2% despite a predicated rise of 0.4%.
The UK’s Manufacturing Production index is compiled by the National Statistics Office and measures the level of manufacturing output. It is an important indicator since it measures growth in the country’s manufacturing industry which is a major component of Gross Domestic Product. A low reading is considered bearish for the Sterling.
The disappointing news does not bode well for the struggling British economy. Upon release of the data, GBPUSD plummeted 60 pips from 1.6341 down to 1.6279. Meanwhile EURGBP jumped over 30 pips from 0.8776 to peak at 0.8777.