Factory figures show recovery continues

Manufacturing output rose to its highest level for seven months in October, official data yesterday revealed, suggesting the UK's economic recovery remains on track in the final quarter of the year.

The Office for National Statistics said output from the sector rose 0.6 per cent month on month in October - the best reading since March and double expectations in the market. Statisticians also revised up the result for September, from 0.1 per cent to 0.2 per cent. Economists said the figures gave hope that the private sector can help pick up the slack created by public sector spending cuts.

Vicky Redwood, senior UK economist at Capital Economics, said: "It looks like the manufacturing industry is in a good position to help offset some of the effects of the looming squeeze.

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"But as we have warned before, the sector isn't big enough on its own to keep the recovery going as the public and consumer sectors retrench."

Alan Hamilton, who heads the manufacturing sector team at Clydesdale and Yorkshire Banks, said: "Activity in the sector is still buoyant and demand remains high for UK manufactured products both domestically and abroad."

The wider measure of industrial output fell 0.2 per cent, confounding expectations for a 0.3 per cent rise. This was mainly due to sharp falls in the highly volatile mining, oil and gas sectors and experts said this did not alter the broader picture of an economy that is slowly becoming more balanced.