UK industrial production missed expectations significantly in July, according to figures just out. Production slumped by 0.4% from June to July. Analysts had expected a 0.1% increase. That leaves industrial production up by just 0.8% year-on-year, a pretty feeble expansion given that the UK is seeing solid growth. Manufacturing production figures alone look even worse, with a 0.8% slump on the month in July, leaving production down 0.4% year-on-year. Capital Economics' Paul Hollingsworth noted that both the weakness of the UK's export markets and the strong pound were weighing on manufacturers, but added that the services sector should keep the economy propped up in the near term: "With the UK set to experience a bout of “good” deflation over the coming months, unemployment low and consumer confidence high, the prospects for the services sector look brighter. Accordingly, we expect the overall economic recovery to maintain a solid pace, albeit an unbalanced one, over the second half of this year." The EEF, a lobby group for manufacturers, recently cut its growth rate in half. EEF chief economist Lee Hopley said "We’ve seen the future of the Eurozone on the line once again, turbulence and uncertainty over China and Greece and, of course, oil and gas are still a concern. Against this backdrop it’s no surprise that confidence is faltering and UK manufacturers are feeling less optimistic about their growth prospects for next year." Join the conversation about this story » NOW WATCH: Here are some incredible toys hedge fund boss Steve Cohen has bought with his billions
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