The UK’s industrial sector showed signs of improvement in February and has prompted the National Institute of Economic and Social Research to forecast the economy to grow by 0.1 per cent for the first quarter of this year.
As the Financial Times reports, the improvement in the manufacturing sector is expected to reduce the risk of a triple-dip recession in the country.
The economy contracted by 0.3 per cent in the final quarter of 2012 which prompted fears of a triple dip. But, for the time being, this latest figure minimises the chances of that.
However, the modest growth doesn’t change the trend of economic stagnation which has lasted since 2010. Economists don’t see any grounds for major optimism.
Speaking to The Telegraph, Brian Hilliard an economist for Societe Generale said,” The manufacturing numbers were a pleasant surprise. They lift a bit of the gloom from the releases in recent months, but we shouldn't get carried away. The industrial production figures were flattered by the very cold weather and energy use. All in all, the figures don't alter the basic outlook."
While there was an increase in the February figure, Industrial production was also 2.2 per cent lower in February than in the same month a year earlier. There has been a gradual decline in the sector since early 2011.
In addition, the trade deficit was £3.6bn in February. This is an increase from £2.5bn in January.