UK Production Collapses And Now The Bank Of England Will Do Nothing To Fight Inflation
Apr. 6, 2011
UK production collapsed from January to February, falling 1.2%, indicating the country’s recovery is not on solid footing.
While that same production number was up, year-over-year, the sharp drop in February will likely concern members of the Bank of England’s monetary policy team, meeting today to issue a decision tomorrow.
The main drags on the manufacturing sector were energy production, which slipped in February due to warmer weather, according to the Office for National Statistics. Motor vehicle production was up, but that may be dented in future months due to supply chain issues emanating from Japan.
With recent data on home prices showing continued weakness, and the rise in shop prices slowing, it’s unlikely the Bank of England will be forced to hike rates as soon as tomorrow.