U.K. Manufacturing Falters, As Credit Crunch Spreads

U.K. manufacturing production unexpectedly fell 0.5% in March from 0.4% the month prior, as the housing slump weighs on the economy. A look at the components reveals 10 out of 13 declined including basic metals (-0.7%), rubber and plastics (-1.8%), transportation (-0.3%) and paper and printing products (-0.9%). Consumers are battling rising inflation due to record food and oil prices and the declining value of their homes, which has weighed on confidence and consumption. As the outlook grows dimmer demand for long lasting goods has softened, with durable goods falling 2.4% from a 1.6% gain in February. In addition to the declining domestic picture, U.K. producers are battling the slowing global economy. The BoE is expected to leave rates unchanged at tomorrow’s policy meeting. However, they may potentially reverse their sentiment with consumer confidence, the service sector and manufacturing all reporting worse than expected results. The vote was already anticipated to be close before the string of fundamental data.

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