Weaker output and trade figures add to uncertainty

UK manufacturing output fell unexpectedly in June and the country's trade deficit widened, increasing worries over how delicate any economic recovery may be.

Manufacturing output fell 0.4% in June, against analysts predictions that it had risen modestly by 0.2%. Despite the fall, most analysts agreed that this was not enough to force the Office of National Statistics to revise downwards its second-quarter gross domestic product number later this month.

Ross Walker, an economist at RBS, said: "Disappointing. I mean obviously it has come in below what had been implied by the preliminary estimate, though by not enough, at least arithmetically, to get a downward revision to GDP, so it's a marginal undershoot. It's still disappointing in the sense that it seems to corroborate some of the recent survey data that has shown quite a significant deterioration."

Meanwhile June's trade deficit rose to £8.9 billion, well ahead of the predicted £8.1 billion.

Victoria Cadman, an economist at Investec, said: "Both sets of figures were on the disappointing side, and without an explanation for what has driven the surprise, it's a source of worry.

"They look like they are enough to push down GDP for the second quarter at least a little bit. Even if we are talking about 0.1% less, that is still pretty bad and it is getting very close to that flat level."