UK industrial output plunged in July

conveyor belt with cardboard boxesUK industrial production in July was very weak and exports dropped the most in nine years, according to official figures released by the Office for National Statistics (ONS).

Manufacturing output was 0.5% lower in July compared with the same month last year and exports of goods fell by over 9 percent – the steepest drop since July 2006.

The overall index of production (IoP) – including mining and quarrying and utilities – climbed up 0.8% over the same period.

The UK’s deficit in its trade in goods expanded to £11.1 billion in July, up from £8.5 billion in June.

Ross Walker, an RBS economist in London, told Bloomberg: “The economy is losing momentum. I don’t think it’s collapsing — but there are clear signs of stress,”

He added: “You see it in today’s numbers, in the external facing parts of the economy that are coming under pressure.”

The lacklustre results indicate that economic momentum in the UK is not at a level that the Bank of England would feel is ready to begin hiking interest rates.

The BoE is set to vote on Wednesday on whether to raise rates from 0.5 percent.

The decision will be announced at 11:00 GMT on Thursday. Economists expect that there will be a repeat of August’s vote for no change, with many predicting that the first hike will occur in early 2016.