Brexit woes: Industrial output declines & trade deficit increases - by Joe Mellor

The deal PM May secures with the EU is increasingly important, but the anti-European rhetoric from the Government is making that less likely.

The vote for Macron, who is very pro-EU, in France might strengthen the EU’s resolve in the negotiations with the UK.

Industrial output dropped by 0.5% in March, sharper than the 0.3% fall that had been forecast.

This followed a 0.7% fall in February leading to a total growth of just 0.1% for the first quarters of the year according to the Office for National Statistics figures.

It was hoped that a fall in the pound might increase exports but there doesn’t appear to be much evidence this has happened. Instead there was a surge in imports, up £2.9bn over the month, with an increase in imports of goods from both EU and non-EU countries.

The broad services and goods deficit jumped to £4.9bn in March from £2.6bn in February.

Exports increased by just £600m. Samuel Tombs, the chief UK economist at Pantheon Macroeconomics, said the March trade figures were “simply dreadful”.

The uncertainty over Brexit appears to be grinding the economy to a halt and a turnaround in the next quarter is essential, however that looks unlikely.

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