UK's heat wave cooks industrial output
August 6, 2003
By Bloomberg
London - Britain's heat wave in June pushed up industrial output at its quickest pace in 11 months, and may prompt the government to boost its estimate of economic growth.
Production by factories, utilities and mines jumped 0.7 percent, driven by a 7.8 percent increase in electricity, its biggest gain since February 1991, the government said.
UK manufactured output picked up by a better-than-expected 0.2 percent in June from May.
The hottest June since 1976 prompted Britons to switch on air conditioners. At the same time, a strike in France curbed supply from Electricite de France, prompting the nation to import electricity from the UK for the first time.
"Industry looks healthier than it has in a while," said Ross Walker, an economist at Royal Bank of Scotland, who is considering revising up his estimate for second-quarter gross domestic product to 0.4 percent from 0.3 percent.
The figures also reduce the need for the Bank of England to cut interest rates again. Policy makers reduced their benchmark lending rate nine times since the beginning of 2001 to 3.5 percent, to spur consumer spending as manufacturers suffered their worst slump in a decade.
Britain's temperature averaged 15.5¡C in June, 1.9¡C above normal and the second-warmest since records began in 1961, according to the UK Meteorological Office.
Output of electricity, gas and water gained 3.9 percent in June, more than double the 1.7 percent increase recorded the month before. Industrial production accounted for about a fifth of the UK economy.
The hot weather had continued. The temperature might rise to a record 37.8¡C, this week, the office said.
That forced Network Rail, the owner of Britain's railroad tracks and stations, to lower speed limits on key lines because of concerns the heat might warp rails. Virgin Rail Group, National Express Group's Central and Silverlink Trains cancelled services because of concern the heat might cause rail tracks to bend.
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