Manufacturing in the U.K. gained for a second month in December. Production increased 0.3 percent, after gaining a revised 0.5 percent in November, the Office for National Statistics said in London today. Economists predicted an increase of 0.2 percent, the median of 33 estimates in a Bloomberg News survey showed.
BOC Group Plc and Reckitt Benckiser Plc both reported higher earnings today, adding to signs that manufacturing is picking up. A surge in oil prices and a slump in demand pushed the sector, which accounts for 15 percent of the $2 trillion U.K. economy, into recession in the first half of 2005.
``The tentative improvement in November and December suggests that the sector will be less of a drag on growth this year, making it easier for the bank to leave rates on hold for now,'' said Ross Walker, an economist at Royal Bank of Scotland Plc in London.
The pickup in manufacturing comes as gross domestic product expanded a more-than-expected 0.6 percent in the fourth quarter, up from 0.4 percent in the third, the statistics office said Jan. 25. The Bank of England expects the pace of growth to accelerate to 2.5 percent this year, up from a 13-year low of 1.8 percent last year.