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British manufacturing output unexpectedly fell for the second month running in September, casting doubt on the pace of the sector's recovery from recession.

The Office for National Statistics said on Monday that manufacturing output fell 0.3 percent - the biggest drop since March and compared with analysts' forecasts of a rise of 0.3 percent. That left output 0.8 percent weaker than a year ago.

Overall industrial production was also weaker than expected, rising by just 0.5 percent instead of the 0.8 percent predicted by analysts. That was because of maintenance work in certain oil fields being extended into September.

But the ONS said revisions to back data meant that the quarterly estimate for production - a drop of 0.6 percent - was in line with published GDP data for the third quarter.

Analysts said the report was disappointing given signs of a rebalancing in the economy away from its reliance on consumer spending and given that there has been a pickup in demand from the euro zone, Britain's main trading partner.

The tepid performance of industrial production in September stood in stark contrast to figures from Germany, which showed a bigger-than-expected 1.2 percent surge in output.

The Chartered Institute of Purchasing and Supply/RBS survey of manufacturers showed modest output growth in September, followed by even faster expansion in October.

Copyright Reuters, 2005


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