The Office for National Statistics said output rose by 0.1% from June, better than the expected 0.2% decline and the revised no-change month-on-month reading for June.
Advertisement
United Kingdom factory output declined a worse-than-expected 0.9%, but North Sea oil and gas production surged 5.6%.
In the three months to July 2016, total production and manufacturing output increased by 1.0% and 0.5% respectively on the previous three months.
Chris Williamson, chief economist at Markit, said: “The data confirm indications from business surveys that the vote to leave the European Union on June 23 had an immediate damaging impact on the economy”.
Ruth Gregory, UK economist at Capital Economics, said recent surveys also pointed to an improvement in export orders, which indicated that sterling’s fall would “start to help to cushion the blow for manufacturers”.
Data released earlier on Wednesday showed Germany industrial production posted its steepest fall in 23 months in July.
A closely watched survey by financial data company Markit had already suggested British manufacturing output plunged in July before staging one of its sharpest rebounds on record in August, adding to signs that the impact of the referendum was not a bad as some forecasters feared.
Economists expect doubts about Britain’s future trading ties will continue to cloud businesses’ plans, eventually weighing on economic growth even if the country avoids a large immediate hit from the shock vote to leave the EU.
The fall was offset by a 5.6 per cent surge in North Sea oil and gas output.
The pharmaceutical sector, which is often volatile, represented the main drag on manufacturing, but many other sectors fell too.
Advertisement
The British Pound traded lower versus other major currencies after today’s manufacturing production numbers came well below expectation, with manufacturers cutting production at the fastest pace in a year in the immediate aftermath of the Brexit vote. But the ONS said Wednesday they found little evidence of this in July, although the agency did say the decline in the pound pushed up manufacturers’ raw material costs.
