What's going on?

Despite the ongoing challenges of Brexit, the British economy seems determined to keep calm and carry on: figures on Wednesday suggested that UK industrial output is enjoying its longest run of growth in twenty years.

What does this mean?

Following on from six previous months of growth, British manufacturers scored their biggest monthly production increases since 2011 in November. A blast of unusually cold weather helped boost demand in the British energy sector, while monthly production in the mining and quarrying industry grew by over 8% as the North Sea’s largest oil field resumed production. Construction, however, is on course to shrink for a sixth straight quarter.


Industrial output accounts for about 15% of UK GDP � important enough that economists are expecting the surge to provide a boost to full-year economic growth.

Why should I care?

The bigger picture: While manufacturing is on the up, there are still some serious economic problems in the UK.

Despite its impressive recent run, Britain�s industrial sector is still a shadow of its pre-2008 financial crisis self. Meanwhile, the really significant bit of the UK economy � its services sector � is, according to the British Chambers of Commerce, not doing so hot: it�s forced to confront the need to raise prices in 2018 even as wage growth remains anemic.

For markets: A strong European economy will help soak up British manufacturers� products.

Despite manufacturing gains last year, overall economic growth in the UK slowed during the first nine months of 2017, due in part to the inflation squeeze on consumers. But British manufacturers have been helped by the lower pound and growing demand for their products from some foreign markets, including the eurozone, which buys half of all British exports and is undergoing a �euroboom� these days. Worth staying friendly with!