Data released by the Office for National Statistics (ONS) reported that UK factory output rebounded in January, after falling in December.
Manufacturing output rose 0.7% in the month, following a fall of 0.3% in December. This represents the first monthly rise in four months, and was greater than the 0.2% increase forecasted by economists .
The pound rose against both the dollar and the euro following the report.
However, output in the industrial sector as a whole rose by only 0.3% month-on-month in January. This was weaker than expected, and determined by a 6.3% drop in crude oil and gas extraction in the North Sea .
Total production, accounting for just over 10% of the British economy, fell 0.4% in the fourth quarter instead of the 0.5% previously reported. The ONS said this will have no impact on overall growth .
Chancellor, George Osborne, has warned that the economy is facing a “dangerous cocktail” of risks from overseas in 2016, as growth slows in major emerging markets, stock markets tumble, and oil prices slump amid fading global demand .
Economists say the referendum on European Union membership could also drag on growth.
Analyst at Deloitte, Mark Stephenson, said: “The challenges UK manufacturers are up against should not be underestimated” .
“Slow global economic growth, weak Chinese trade data, downgraded UK growth forecasts, turmoil in the steel industry and [surveys of the sector] at its lowest point for almost three years, are just some of the factors at play,” he added .
 Telegraph. ‘Pound rises as Britain’s factories roar back into life’. telegraph.co.uk
 Bloomberg. ‘UK industrial output rebounds on manufacturing, utilities’. bloomberg.com
 Reuters UK. ‘UK industrial output returns to growth in January, manufacturing strong’. uk.reuters.com