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U.K. Factories See Small Gains

Manufacturing output rose 0.2 percent in January compared with a year earlier, suggesting Britain's recovery from a deep recession is not accelerating quickly.

LONDON (AP) -- U.K. manufacturing output rose 0.2 percent in January compared with a year earlier, but the output of all production industries dropped by 1.5 percent, the Office for National Statistics said Wednesday.

The report suggested that Britain's recovery from a deep recession is not accelerating quickly after returning to growth in the fourth quarter with a gain of 0.3 percent.

The small increase in manufacturing was led by a 39 percent jump in motor vehicle output and a 14 percent rise in aircraft, the agency said.

Oil and gas extraction dropped by 8.8 percent and coal mining was down 25 percent. Electricity supply was down nearly 12 percent.

"January's poor platform means that even 0.5 percent monthly rises in both February and March would leave a quarterly gain similar to that in Q4," said Jonathan Loynes at Capital Economics.

"So industry now looks unlikely to drive any significant pick-up in GDP growth in Q1. What's more, with the latest trade figures still showing few signs of any real boost from the lower pound, the outlook for the export-sensitive industrial sector remains pretty fragile."

Howard Archer, economist at IHS Global Insight, cautioned against reading too much into the January figures.

"It adds to the overall evidence that the economy took a significant hit from the weather in January, but latest data and survey evidence generally suggest that the economy bounced back pretty well in February," Archer said.

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