British industrial output unexpectedly picked up in June after oil producers delayed normal seasonal maintenance. But as David Pollard reports, falling car production, a slide in construction and slowing house prices all bode poorly for future months.
The writing's not so much on the wall, as on the property boards. Britain's normally red hot housing market showing an unaccustomed cooling, according to a new survey. It shows prices last month rising at their slowest in over four years. And below all forecasts in a Reuters poll. (SOUNDBITE) (English) CHIEF INVESTMENT OFFICER, CCLA INVESTMENT MANAGEMENT, JAMES BEVAN, SAYING: "In this environment, the only transactions that are carrying the market are those that relatively sensible prices and this is an environment, I suspect, that may persist for some while until we get more clarity on the outlook for the economy writ large." They're not the only numbers that point the finger at softening demand. Car production dropped by 3.6 per cent in June - the sharpest decline since 2013 - after already falling over two per cent in May. Construction slipped - as did exports in their biggest monthly slide in a year. An overall 0.5 per cent surprise rise in June industrial output leaving some economists unimpressed .... Especially when set against a surprise jump in the UK trade deficit for goods - to 12.7 billion pounds. (SOUNDBITE) (English) CHIEF INVESTMENT OFFICER, CCLA INVESTMENT MANAGEMENT, JAMES BEVAN, SAYING: "What is very clear is the UK economy is having a difficult time. There is a possibility that the UK ends up in a recession in due course. Now, that of course is discouraging for those who hope that we will have a smooth Brexit but is absolutely consistent with the premise that in an environment of uncertainty people will sit on their hands." Others disagree. In another Reuters poll, most economists see Britain avoiding a contraction in the coming year. But sterling at a three-week low before this new data adds to a thirteen per cent loss since last year's vote to leave the EU. A weakening pound the most real sign of the times, perhaps, for a Brexit battered Britain.