UK industrial output exceeds forecasts

The UK’s industrial production rose by 0.7% month-on-month in June 2025, rebounding from an upwardly revised 1.3% decline in May and beating market expectations for a modest 0.2% increase. This marked the first monthly expansion since February, signaling a partial recovery in activity across several key sectors.

Manufacturing output increased 0.5% after falling 1.0% in May, driven by stronger performance in transport equipment, pharmaceuticals, and food & beverage production. The utilities sector also showed a notable turnaround, with electricity, gas, steam, and air-conditioning supply jumping 3.3% after a 3.8% contraction the previous month, aided by higher energy demand during early summer heatwaves.

Water supply, sewerage, and waste management posted a steady 0.5% gain, accelerating slightly from 0.2% in May, reflecting both higher seasonal demand and infrastructure maintenance activity. The contraction in mining and quarrying output eased significantly to -0.4% from -2.9%, helped by modest gains in oil and gas extraction and a smaller drop in quarrying operations.

On a year-on-year basis, industrial production grew 0.2%, recovering from a downwardly revised 0.2% decline in May and outperforming market expectations for a 0.3% fall. The annual gain was supported mainly by utilities and select manufacturing subsectors, though overall growth remains constrained by weaker output in energy-intensive industries and subdued external demand.

While June’s rebound offers a sign of resilience, analysts caution that momentum may remain fragile. Global manufacturing headwinds, elevated borrowing costs, and lingering uncertainties in trade policy could limit sustained growth in the second half of 2025. Upcoming PMI data and export figures will be closely watched to assess whether June’s recovery marks the start of a broader industrial upturn or merely a temporary rebound from May’s slump.