British industrial output slides, fears of triple dip recession

Britain's industrial output sank unexpectedly in October when production of alcohol fell and maintenance work shut down parts of the oil and gas industry, stoking concern of a triple dip recession, analysts said. Industrial production fell by 0.8 percent in October from September, the Office for National Statistics (ONS) said in a statement. That confounded market expectations for a monthly increase of 0.8 percent, according to analysts polled by Dow Jones Newswires. On a 12-month comparison, industrial output fell 3.0 percent in October, which was far worse than expectations for a 0.6-percent decline. The biggest downward monthly contribution came from the manufacture of coke and refined petroleum, which slumped by 19.6 percent due to planned maintenance and lower production reported at a number of sites. Output of food products, beverages and tobacco, sank by 2.4 percent. The ONS added that this was largely due to weaker output from alcohol manufacturing industries. "The further drop in UK industrial production in October raises the chances of a triple-dip recession in the wider economy," said Capital Economics analyst Samuel Tombs. "The recent weakness of surveys suggests that a recovery in manufacturing output is unlikely. As a result, it seems that industry will be one of the key sectors prompting a renewed fall in GDP in the fourth quarter." Recent official data showed Britain had escaped from its double-dip recession in the third quarter of 2012, with gross domestic product (GDP) growing 1.0 percent. However this was due to one-off factors such as the London Olympics and rebounding activity after public holidays in the second quarter of the year. The ONS added Friday that manufacturing output, which excludes mining and quarrying, as well as the electricity, gas and water supply sectors, sank by 1.3 percent in October from September, and fell 2.1 percent on an annual basis. Britain's economic outlook darkened this week after the government forecast that the economy was heading for shrinkage of 0.1 percent in 2012 and would grow by less than expected in coming years The revised official forecast, announced in Wednesday's budget statement, compared with a prior growth estimate of 0.8 percent.