Industrial output suffers biggest fall in four years - ONS

UK industrial production fell at its fastest rate in more than four years in October, according to official figures.

The Office for National Statistics (ONS) measured a 1.3% decline month-on-month, citing the temporary closure of the major Buzzard oilfield in the North Sea and lower factory output, particularly among pharmaceutical firms.

It was the sharpest decline since September 2012, the body said, when the Nexen (KSE: 005720.KS - news) -operated oil field also endured production woes.

Buzzard was shut down for routine maintenance and while the lack of pumping is a blip in the figures it contributed to a 1.1% fall in industrial production over the 12 months.

The three months to October showed a contraction of 0.9% on the same period in 2015.

Factory output figures showed falls across a range of sectors.

The ONS reading was far more downbeat than economists had expected - with private sector surveys from the likes of the CBI and Markit (NasdaqGS: MRKT - news) suggesting at that time that manufacturers were benefitting from boosts to orders due to the weakness of the pound in the wake of the EU referendum making their goods more competitive.

However, the most recent purchasing managers' index reading of activity pointed to headwinds from the higher cost of importing raw materials - adding price pressure to their products.

Sterling, which has enjoyed something of a recovery in recent weeks, fell back below $1.26 when the ONS figures came to light. It also sagged against the euro.

Naeem Aslam, chief markets analyst at Think Markets, said: "The UK manufacturing data came much weaker than expectations and this presents a major threat for the economy.

"So far investors have been of the mind frame that the country is overcoming its major economic headwinds but today's number clearly shows how much off beat they are with respect to reality.

"It is important to keep in mind that manufacturing represents nearly 70% of the production index."

However Lee Hopley, chief economist at manufacturing organisation EEF, said she was expecting a comeback.

"While this is a disappointing set of figures, more upbeat commentary coming from across the sector - driven by resilience in the domestic market and a brightening outlook overseas - points to this trend reversing in the final months of the year."