Sterling slips after UK factory output posts biggest drop in year – Reuters

Sterling hit day’s lows against the dollar and euro on Wednesday after data showed British manufacturing output fell at the fastest pace in a year in July, just after Britain’s shock vote to leave the European Union.

Manufacturing output fell 0.9 percent on the month, a bigger fall than the 0.4 decline forecasted by economists. But overall industrial output unexpectedly rose thanks to strong oil and gas production, the Office for National Statistics said.

The data are the first official figures to cover output solely for the period after the June 23 Brexit vote. Britain was plunged into political chaos in the weeks after the referendum before the formation of a new government under Prime Minister Theresa May.

Sterling initially strengthened on the data before falling to the day’s low of $1.3377 and then recovering to around $1.3390. That left it down 0.4 percent on the day, having hit a seven-week high of $1.3445 on Tuesday. Against the euro, it weakened to 84.01 pence.

Britain’s blue-chip FTSE 100 turned positive after the data and was last up 0.2 percent.

(Reporting by Jemima Kelly and Alistair Smout; Editing by Patrick Graham)