UK industrial output slides and its trade deficit widens on a darker global outlook - but Germany surprises economists with a rebound in its exports. David Pollard reports on the latest, conflicting signals from Europe's economies.
Britain's been one of the brighter economies in recent times - but could its flame be dimming? New figures show its biggest annual fall in industrial output in over two years - down 0.5 per cent, with manufacturing down 1.8 per cent. Both much sharper drops than expected. UK trade data also raised a few eyebrows - a record current account deficit of 32.6 billion pounds in the last three months of last year. A weakening UK currency, though, could provide some relief. SOUNDBITE (English) IG SENIOR ANALYST, CHRIS BEAUCHAMP, SAYING: "The weakness of sterling has maybe helped in some ways for the UK economy. I think it's a bigger issue where sterling goes in the next few months and how that plays out in relation to the Brexit referendum. But certainly with the euro zone economy not exactly where it should be, you will see some weakness in the UK as well." But Germany's latest figures: they surprised with an exports mini boom. They rose 1.3 per cent on the month after falling the two previous months - in part on strong demand from European partners. The outlook though - still perhaps not that rosy. SOUNDBITE (English) IG SENIOR ANALYST, CHRIS BEAUCHAMP, SAYING: "It has held up better thanks to the ECB QE programmes over the last couple of years but there's a lot more to be done, and so long as China continues to show weakness, that will feed through to the German economy and its exporters." And the euro zone as a whole still looking distinctly grey. SocGen the latest to voice concern - with a GDP downgrade: it now sees 1.3 per cent this year, down from 1.6. Germany's numbers will be pored over next week - its leading economic institutes update their 2016 forecasts on April 14th.