UK production contracts 1.7% – Bank of England to print more money early in the New Year?
The government funded Office for National Statistics were out today with the UKs production numbers and they don’t make for pretty reading. From the release:
• The seasonally adjusted Index of Production fell by 1.7 per cent in October 2011 compared with October 2010.
• The seasonally adjusted Index of Manufacturing rose by 0.3 per cent in October 2011 compared with October 2010.
• The seasonally adjusted Index of Production fell by 0.7 per cent between September 2011 and October 2011.
• The seasonally adjusted Index of Manufacturing fell by 0.7 per cent between September 2011 and October 2011.
Specifically on manufacturing the ONS said:
Seasonally adjusted manufacturing output fell by 0.7 per cent in October 2011 compared with September 2011. Eight manufacturing industries sectors fell with five rising. The largest contributions to the month on month fall in manufacturing output were the manufacture of basic metals and metal products industries which fell by 2.1 per cent, followed by the other manufacture and repair industries which fell by 2.9 per cent and the manufacture of basic pharmaceutical products which fell by 2.7 per cent. In contrast, the manufacture of machinery and equipment industries rose by 2.5 per cent in October 2011 compared with September 2011.
In the 3 months to October 2011 compared with the previous 3 months, manufacturing output fell by 0.7 per cent. This is the first fall in the 3 months on previous 3 months growth since October 2009.
Now, remember that one of the very few reasons actually given for historic money printing by the BoE was to help UK manufacturers export their way to growth. It isn’t working, for all the money printing UK manufacturing is contracting.
Not only does this data prove that the BoE’s plan of printing the UK to property seem to to be failing it also really calls into question that very questionable 0.5% GDP print last month. That’s the benefit of fudging the deflator used we guess.
It also means that yet more money printing courtesy of the BoE is all but assured. Look for the BoE to print up between £50bn-£75bn in the first three months of 2012. Which will take the BoE’s balance sheet to a level that would make even this most profligate central bank blush.
- David Blanchflower says the Bank of England will print more money before November
- UK PMI ‘drops like a stone’ to a 28 month contraction low – completely contradicts today’s 0.5% GDP print
- Bank of England see CPI inflation falling to target by the end of next year… possibly/maybe
- UK unemployment rises 80,000 – quantitative easing / money printing all but guaranteed
- Bank of England releases Financial Stability Report: calls the environment “exceptionally threatening”
Link to this article: : http://www.goldmadesimplenews.com/gold/uk-production-contracts-1-7-bank-of-england-to-print-more-early-in-the-new-year-5875/