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The risk of taking figures in isolation

Industrial production figures from the Office for National Statistics show there was a reduction of 0.4% in April against expectations of an increase of 0.5%. This compares unfavourably with the 2.2% rise in March but there are many who believe the dangers of taking one figure in isolation are there for all to see.

While there's no doubt that April saw a slowdown in industrial activity in the UK it was compared to a very strong month of March which on the surface would indicate a significant slowdown. However, the UK economy is still very much in positive ground despite the problems not only within the UK but in Europe, the Far East and the US. This reduction in industrial activity will take some of the pressure off inflation which for many people is starting to register on their radar.

The problem with UK economic data at the moment is the fact that different sets of data appear to be showing the UK economy moving in a different direction. When you also throw in the potential for abnormally strong months because of issues surrounding taxation and the general election it becomes ever more difficult to read the underlying strength or weakness of the UK economy. It is therefore best to take a longer-term view of the UK economy and consider a number of months of data rather than one figure in isolation.

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