Newspaper article The Evening Standard (London, England)

Manufacturing Slide Triggers Renewed Fears of a Double Dip

Newspaper article The Evening Standard (London, England)

Manufacturing Slide Triggers Renewed Fears of a Double Dip

Article excerpt

Byline: Russell Lynch

THE biggest manufacturing slump for six months torpedoed Chancellor George Osborne's "march of the makers" today, and sent fears over a double-dip recession to a new pitch. The Chancellor's Budget rallying cry looked a distant memory as official figures showed an alarming 0.7% slide in production from Britain's manufacturers during October. This was much worse than the 0.3% fall pencilled in by the City, and the worst since April, when firms suffered disruption in the wake of Japan's tsunami and the extra bank holiday.

The latest depressing figures come after slashed growth forecasts from the Office for Budget Responsibility and warnings by the British Retail Consortium over the weakest High Street sales for six months.

The welter of bad news cast a grim backdrop to the Bank of England's latest policy meeting, which begins today. Threadneedle Street is widely expected to hold fire on more money-printing to prop up the nation's ebbing recovery until February, despite mounting concerns over the impact of Europe's lingering debt crisis.

Investec chief economist Philip Shaw called the figures a "grim start" to the fourth quarter. He said: "It tends to bear out our view that the UK is going to double dip and will re-enter recession.

These figures seem to suggest it could be sooner rather than later."

The latest blow for manufacturers -- which account for some 10% of the UK economy -- means the sector managed growth of just 0.3% over the past year. The UK's wider production industries, including mining, quarrying and utilities, sank 0.7%. A mild October saw less demand for energy as households kept their heating off. A rapid improvement in fortunes looks unlikely with surveys from the Chartered Institute for Purchasing and Supply pointing to more manufacturing pain in November. …

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