UK manufacturing output has suffered its biggest decline in 16 months, suggesting that Britain's recovery may not be as secure as hoped.
Total factory production across the UK fell by 0.7% in May compared to April, dashing expectations of a 0.2% rise. Manufacturing led the decline, with output falling 1.3% economists expected a 0.4% increase.
Manufacturers continue to face a number of headwinds, especially subdued external demand across Europe, which continues to hamper export prospects
As a result we saw a sharp sell off of the pound against most of its peers shortly after the disappointing output news. As this dampened investors’ expectations of a rise in interest rates in the UK. However the pound had regained most of its losses by the end of Tuesday’s trading day.
The NIESR's estimated that the UK economy grew by 0.9% in the second quarter of 2014. This is a slight acceleration on the 0.8% recorded in the first three months of the year. This would mean that the UK economy had grown by a healthy 3.2% in the last 12 months, making it larger than its pre-crisis peak
Early on Tuesday Germany's trade surplus increased in May, as imports fell faster than exports. Germany exported goods worth a total of €92.8B down 1.1% while imports dropped by 3.4% to €74.1B.
This morning it was reported UK house prices fell by 0.6% in June, according to Halifax's monthly survey of the sector. This is a bigger drop than expected, and suggests the property sector may be cooling off as new mortgage affordability rules are applied.
The index also shows that prices have risen by 8.8% across the country in the last year, pushing up the average house price to £183,462.
Overnight in Australia the monthly survey of consumer confidence rose 1.9 per cent in July to 94.9 but still well below the 100 point level that would indicate optimist’s equal pessimists.
19:00 USD- US Federal Reserve meeting minutes
19:30 EUR – ECB President Mario Draghi speech
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