12 March 2001, 12:51  U.K. Industrial Production Shows No Change in January

London, March 9 (Bloomberg) -- U.K. industrial production wasunchanged in January, after falling 0.6 percent the month before,as production of mobile phones and optical networks slumped.Analysts had forecast a 0.5 percent increase. ``The fact the high-tech sectors are taking a pasting doesn'tbode well for industry,'' said Peter Dixon, an economist atCommerzbank AG in London. ``It confirms the impression thatmanufacturing is struggling. There's gathering evidence that aslowdown in the U.S. is hurting U.K. production.'' The figures will add to pressure on the Bank of England to cutits benchmark lending rate from 5.75 percent to prevent aslowdown in the U.S. from spreading to Britain. The centralbank left the key rate on hold yesterday after cutting it a quarterof a percentage point cut in February. Bonds rose and the pound gave up some of its earlier gainsafter the report, which suggests rates may be cut sooner thanforecasts called for. The yield on two-year notes, one of thesecurities most sensitive to changes in interest rates, fell to a22-month low. Production of cell phones and networks slumped 29 percent inJanuary from December, dragging down the industrial index.Production declined as the worldwide market for cell phonesand for data and telecommunications networks began drying up.

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