U.K. Manufacturing Unexpectedly Falls

Howard Archer, an economist at IHS Global Insight in London, was quoted saying that factory production “clearly does still face a challenging environment.” In a Reuters report, Archer said, “We have a sneaking suspicion that the Bank of England is not quite yet done on the QE front. This reflects our belief that the economy is likely to stutter over the coming months in the face of still serious domestic and international headwinds and that a majority of MPC members may feel that a final small helping hand is in order.”

He continued, “The sharp drop in manufacturing output in February is a sharp reminder that the economy still faces a tough battle to generate decent sustainable growth. And while consumer price inflation may prove stickier than previously expected in the near term due to elevated oil prices, it should still eventually fall appreciably further as underlying price pressures are limited by extended below-trend economic activity, significant excess capacity and ongoing wage moderation resulting from high and, likely, rising unemployment.”