Factory slump may influence UK rate rise timing

A slump in manufacturing in July and a sharp widening of the trade deficit show Britain’s economic recovery is losing some steam and may prompt the Bank of England to stress that it is in no rush to raise interest rates from crisis-era lows.

Factory output suffered its first year-on-year fall in nearly two years, hit by an earlier than usual summer shutdown of vehicle production lines but also by weaker demand from other major economies, reflecting concerns about global growth.

Exports of goods dropped by more than 9%, the biggest fall since July 2006, the Office for National Statistics said.