An important week ahead, with the release of both the Index of Production and UK trade figures for October.
Index of Production
The Index of Production is set to be released on Wednesday by the ONS. In Q3 we saw manufacturing output decrease by 0.9% following impressive growth in Q2. However, healthy PMI recordings and EEF manufacturing data points to a moderate expansion in Q4. This should lead to overall growth in 2016, in line with our expectations.
Friday sees the release of UK trade figures for October. Following on from impressive export growth in Q3, which saw the deficit on trade in goods narrow by £1.5billion, we expect to see a further month of rising exports. Improving demand conditions in key trading partners, illustrated through rising PMIs across Europe are expected to have boosted sales. The benefits of the depreciation of sterling have also started to come through. This is particularly true in more commoditized sectors where the effects will have filtered through relatively quickly, bringing with it improved competitiveness and thus a boost to exports. The full force of this is however not expected to be felt until next year when the benefits spread through to high value sectors.