British factory output rose a bit more than expected in June while quarterly industrial production was better than first estimated, official data showed on Friday, suggesting weak second quarter growth may get a small lift. The figures, which came a day after the Bank of England cut interest rates by a quarter point to 4.50 percent for the first time in two years, still depict a struggling industrial sector, which makes up about a fifth of the economy.
The Office for National Statistics said manufacturing production rose 0.2 percent in June against forecasts of a 0.1 percent rise and following a revised 0.2 percent gain in May. April's 0.5 percent rise was revised up to 0.8 percent.
The broader measure of industrial production was flat on the latest quarter compared with a fall of 0.4 percent previously estimated in the latest national accounts figures.
That revision should add 0.08 percentage point to gross domestic product growth in the second quarter, the ONS said.
"It looks like there could be an upward revision to second quarter GDP growth from 0.4 percent to 0.5 percent," said Alan Castle, UK economist at Lehman Brothers.
"The Bank of England ... probably built in an upward revision to its forecast for growth that we are going to get in the Inflation Report," he said.
The BoE's latest economic forecasts in the Inflation Report, due on Wednesday, will be crucial in determining whether there are more interest rate cuts in store.
The ONS said that it had made the data available in time for the MPC to use them at its rate-setting meeting this week.
While the figures were supportive of a cautious approach to any future rate cuts, financial markets did not react much to them, with gilt futures slightly down on the session and the pound trading at $1.7775 to the dollar.
In the second quarter, manufacturing output fell 0.3 percent from the previous quarter after a decline of 0.9 percent in January-March, putting it in a technical recession.
But that three-month rate was much improved from the 1.6 percent quarterly contraction seen in the three months to May.
Indeed, analysts said that the upward revisions to prior months bring the official figures more in line with business surveys which suggest the slump isn't quite so deep and gave some hope for a recovery.
"It paints a more encouraging picture of the manufacturing sector heading into the second half of this year," said Robyn Barnett, UK economist at UBS.
The monthly gain in manufacturing output was mainly due to increases in output in the food, drink and tobacco industries and manufacturing of chemicals and man-made fibres.
The most significant decrease was in the transport equipment industries, the ONS said.
Industrial production was flat in June compared with a 0.2 percent gain in May, and also slightly better than forecasts for a 0.1 percent drop. It was down 1.9 percent on the year.
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