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Reacting to the publication by the Office for National Statistics (ONS) of
industrial and manufacturing output figures for August, David Kern, Economic
Adviser to the British Chambers of Commerce (BCC), commented: "Manufacturing
figures for August 2006 confirm that a gradual upturn is slowly consolidating
and gathering some momentum.
"Manufacturing output rose by 0.4% between July and August 2006, broadly as
expected.
"In the three months June-August 2006, manufacturing increased by 0.7% compared
with the previous three months and by 1.25% compared with the same period a year
ago.”
"The three-month-on-three-month comparison shows that there were widespread
increases in output, with significant increases of 1.8% in the chemicals and
manmade fibres industries and 1.7% in the machinery and equipment industries."
"The manufacturing figures remain weak by historical standards and the recovery
is still fragile.
"One key short-term challenge facing the sector is to cope with the consequences
of an increasingly likely rise in interest rates later in the year.
"To minimise any damage to manufacturing, that may result from such a move, the
MPC must ensure that, unlike in August, an increase in rates does not come as a
shock.
"The MPC must also make it clear that, if a rise is necessary, 5% will be a
ceiling and a further series of interest rate increases is not on the cards.”
Source:
RedAlert
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