Contraction in manufacturing and construction sectors

Data from the Office for National Statistics (ONS) showed manufacturing output fell 0.6% in March, construction dipped 0.7% while industrial output as a whole slumped 0.5%, its third straight monthly decline.

The figures, which fell short of expectations, point to a further slowdown in momentum for the UK economy following the country’s decision to quit the EU last year.

To compound matters, the UK’s total trade deficit in goods and services widened by £2.3 billion between February and March to £4.9 billion, contributing nearly half of the quarterly deficit, which also grew by £5.7 billion to £10.5 billion.

Sterling slumped on the news, with the pound falling 0.1% to 1.29 US dollars.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “March’s industrial production figures show that the pressure on consumers’ real incomes from rising inflation is beginning to hurt manufacturers.

“Industrial production has fallen for three consecutive months.

“With households’ real incomes set to come under further pressure from rising inflation, manufacturing output likely will grow only sluggishly ahead.”

The trade figures in particular make for sober reading, with the collapse in the value of the Brexit hit pound failing to provide a significant boost for exporters.

“March’s simply dreadful trade figures demonstrate that Britain is failing to capitalise on sterling’s depreciation,” Mr Tombs added.