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9 February 2018, 11:08
The shutdown of a major oil pipeline in the North Sea has triggered a bigger-than-expected drop in the UK's rate of industrial output.
December's 1.3% month-on-month decline for industrial production was the fastest drop recorded by the Office for National Statistics (ONS) since 2012.
The slump comes after the Forties pipeline, which pumps about 450,000 barrels per day of oil, was shut in mid-December for about three weeks when a crack was discovered.
However there was better news elsewhere for the UK economy, as the ONS also revealed continued growth in manufacturing and a surprise surge in construction output in December.
The rise by manufacturers of 0.3% in the month extended the sector's run of growth to eight months - the longest period for nearly 30 years.
Construction output jumped 1.6% in the month, compared with forecasts for a flat performance.
The figures add to the pressure on Bank of England policymakers after the UK's economy grew by 0.5% in the final three months of 2017.
On Thursday, the Bank admitted that interest rates would have to rise sooner and faster than expected if the current rate of expansion is maintained.
Samuel Tombs, Chief UK Economist at Pantheon Macroeconomics, said the figures from the ONS did not suggest that the Q4 GDP growth estimate will need to be revised.
However, he highlighted headwinds that mean the industrial recovery may lose some momentum.
He said: "The rise in oil prices is forcing producers to raise prices, hitting demand, while the boost to growth from sterling's depreciation in 2016 is starting to tail off.
"Manufacturers will continue to benefit from strong global growth, but they likely will struggle to replicate last year's strong performance."
Separately, Britain’s goods trade deficit with the rest of the world widened to £13.5bn in December. This was bigger than forecasts for a figure of £11.6bn, and is likely to reflect the impact of rising crude oil prices and higher imports.
(c) Sky News 2018: Oil pipeline shutdown hits UK industrial output