Recession fears mount as industrial output slides

The UK’s industrial output fell more than expected and at its fastest pace in six months in October, official data showed on Wednesday, raising concerns the economy may be heading for recession.

The Office for National Statistics said industrial output fell 0.7% in October, more than double the decline forecast by analysts and the biggest drop since April. On the year, industrial output was 1.7% lower, the biggest fall since April.

Manufacturing output also fell 0.7% in October, again the biggest drop since April and more than three times the fall forecast by analysts.

The ONS said the decline in industrial output reflected a broad-based fall in manufacturing and a sharp drop in energy production due to the warmest October weather in five years.

Electricity and gas output dropped by 4.9% in October, its biggest fall since April.

Within manufacturing, 8 of the 13 sub-sectors recorded falls in output, including basic metals and metal products and basic pharmaceutical products.

The figures confirm a recent weakening in business surveys and will raise concerns that Britain's economy is slipping back towards recession, reinforcing expectations the Bank of England may inject yet more stimulus into the economy to boost growth.

However, the central bank is not expected to increase its quantitative easing programme at its monthly meeting on Thursday, as several policymakers have indicated they would prefer to see the existing purchases completed first.

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