UK industrial and manufacturing output dips during May

UK industrial output fell by 0.5% in May compared with April, raising concerns about its prospects following the EU referendum.

Three of the four major industrial sectors declined, with the biggest contraction in manufacturing, according to the Office for National Statistics.

Analysts warned the outlook for UK industry remained "cloudy".

Chris Williamson of Markit said manufacturers were increasingly worried about Brexit-related uncertainty.

He said the decline in May was less painful than had been expected, but there were now "serious doubts" it could be sustained.

On an annual basis industrial output was up by 1.4% on May 2015.

And in the three months to May, output grew by 1.9% at its quickest pace in six years.

'Export boost'

Manufacturing output was down 0.5% month-on-month in May, but was ahead by 1.7% year-on-year.

As well as manufacturing the industrial sectors of mining and quarrying, and electricity and gas also declined month-on-month, but the water and waste management sector experienced growth.

"While the steep drop in sterling seen since the referendum should provide a boost to exports, more important for the longer-term prospects for manufacturing is the extent on the UK's access to the single market can be maintained," said Mr Williamson.

The trade deals that the UK negotiates with other key export markets will also be crucial, he said.