LONDON: Britain’s industrial production fell at the start of 2017, though the U.K.’s trade deficit narrowed in the three months through January, data showed Friday, suggesting the weak pound may be boosting overseas demand for British products. The U.K.’s total production shrank by 0.4% on the month in January, the Office for National Statistics said, as manufacturing output declined by 0.9% on a steep decline in production of pharmaceuticals, which statisticians warn can be erratic. Analysts polled by The Wall Street Journal expected Britain’s industrial production and manufacturing output to have shrunk by 0.4% and 1.0% on the month, respectively. In the three months through January, the U.K.’s total trade deficit narrowed by GBP4.7 billion compared to the preceding three-month period, and stood at GBP6.4 billion, the ONS also said.
Exports of goods grew at the fastest rate in over a decade in the three-month period, and total exports hit a record-high in the first month of the year, but this was offset by record-high imports. January was the sixth consecutive month of growing goods exports, the ONS said. “It could be a sign that our exports are becoming more competitive, but we’re not changing our import patterns yet,” a government statistician said. As the U.K. charts its exit from the European Union, due to begin by the end of this month, its trade balance will become a closely watched proxy for the government’s success in forging new economic relations outside the European bloc. But economists warn that trade data can be volatile, and it will take time for any clear pattern to emerge.
