LONDON, July 7 - Following is a selection of economists' reactions to industrial and manufacturing data for May from the Office for National Statistics: The ONS said manufacturing output dropped 0.2 percent on the month to stand 2.1 percent down on a year earlier, against expectations of falls of 0.2 percent on the month and 2.1 percent on the year.
Industrial production was up 0.1 percent on the month to stand 2.6 percent down from a year ago against forecasts of unchanged on the month and 2.7 percent down on the year. ALAN CASTLE, ECONOMIST, LEHMAN BROTHERS "If you look at the underlying trends, the data confirms that the sector is continuing to contract, with no sign of immediate recovery." "Looking at the big picture it makes the Bank of England's GDP forecast even harder to meet. A rate cut is the most likely option at this week's MPC meeting."
PETER DIXON, ECONOMIST, COMMERZBANK
"The figures are a bit of a disappointment, though maybe it shouldn't come as a surprise as the Purchasing Managers' Index has been below 50. It doesn't give the Bank of England a trigger either way. The waters are very muddy at the moment." "The weakness of manufacturing is not so much a factor of the domestic economy as the situation in Europe, so while a rate cut might help the bottom line, it won't improve sales." DAVID BROWN, ECONOMIST, BEAR STEARNS "Overall, they are weak numbers, and underlining the fact that UK industry is double dipping again. This is a call for the Bank of England to cut rates. As far as the market is concerned, the majority seems to rule it out, but I think there is a very good chance that they are going to consider cutting rates, not only to boost the UK recovery but also to make better contribution to global reflation efforts"//