ONS Figures Calm Fears of Triple-Dip Recession
LONDON -- The latest figures from the Office for National Statistics have revealed that February saw industrial production rise 1% against January 2013, while manufacturing output -- one of the components of the index of production -- almost doubled its February forecast, up 0.8% compared to the previous month's fall of 1.9%.
This has led several economists to say the news eases fears of a triple-dip recession -- feasibly a third in five years -- with BNP Paribas' David Tinsley commenting: "These apocalyptic stories of a Q1 negative (GDP) print and a triple dip are still certainly not guaranteed. If we get some growth in the service sector, we will be OK." Further, Royal Bank of Scotland's Ross Walker said, "It's hardly a dramatic recovery but it does look to be avoiding a symbolic triple dip recession."
Energy production also comprises part of the industrial-production figure, and the colder-than-average weather that the U.K. has been seeing -- including snowfall in spring -- has significantly contributed to the upturn, which had previously been estimated at a 0.3% increase.
Companies that have benefited include British Gas owner Centrica , which reached an annual high last week and gained 1% in today's trading to reach 374 pence. Increased gas usage, higher prices, and more investment in the sector have led to a strong start to the year for the likes of Centrica and BG Group . The latter also profited from today's news, gaining a more modest 0.3%.
Indeed, with the government's proposed "Gas Generation Strategy," the energy sector looks to have a healthy outlook. Interestingly, though, City super investor Neil Woodford recently sold all of Invesco Perpetual High Income fund's holding in BG Group, yet he retains a significant holding in Centrica...
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