Car makers fuel manufacturing stats

Car makers helped drive manufacturing ahead in October though the UK's overall level of exports posted a fresh decline as the trade deficit remained stubbornly high.

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Car makers have helped boost manufacturing figures.

Car makers helped drive manufacturing ahead in October though the UK's overall level of exports posted a fresh decline as the trade deficit remained stubbornly high.

Data from the Office for National Statistics (ONS) showed the manufacturing sector grew by 0.4%, including a 2% contribution from transport equipment.

This meant motor production was 16.8% ahead of the same month last year - as latest industry figures show new car sales racing ahead.

Economists have expressed concern that the UK's recovery has been too reliant on consumer spending while manufacturing and exports have struggled.

However, the improved figures on production come the day after Bank of England governor Mark Carney used a speech to challenge pessimism, saying Britain's household debt and trade deficit were no reason for panic.

Rob Carnell, of ING Bank, said: "For those worried that the UK's recovery is an unsustainable property-price and debt-fuelled boom, today's data present a more upbeat assessment."

But the trade deficit remained at £2.6 billion, according to the ONS, with goods in the red by £9.7 billion - though this was an improvement on the previous month.

Services trade was in surplus by around £7.1 billion. Total exports fell 1.4%, the second monthly fall in a row.

The trade in goods deficit balance with the struggling EU area continued to set records, reaching £6.5 billion.

Martin Beck of Capital Economics said the trade data "made for gloomier reading" than the production figures.

He said: "With household spending powering the economic recovery, import growth could start to pick up in coming months.

"So the odds would seem stacked against a material decline in the trade deficit, at least in the near-term. For now, the UK's economic recovery looks like remaining a distinctly domestic affair"