The index of the state of industry in the UK evaluates the sectors of public utilities, as well as the extractive and manufacturing industries, according to the dynamics of changes in the volume of output.

The indicator represents relative units – the total cost of goods reduced to weight coefficients determined based on the statistical significance of the product. The formula also uses indicators of energy costs and the number of man-hours of working time spent on the production of products. The resulting product is divided by the data for the previous period and multiplied by 100%.

The manufacturing industry occupies 80% of the index, and the other major component is mechanical engineering and aviation production (it is considered together with related enterprises).

Frequency, time and format of publication of Industrial Production

The indicator is released monthly by the Office for National Statistics of the United Kingdom from the 5th to the 9th day - time of publication is 9: 30 GMT (12: 30 Moscow time). The data is output as a percentage change to the value for the previous period.

The impact of the Industrial Production indicator on the stock market and the Forex currency market

The indicator is poorly used by traders in short-term forecasts, and the data output may not have an impact on the sterling exchange rate, but investors pay attention to the published values, for the same reason as the Bank of England.

The growth of the index of the state of industry indicates The central bank on the need to prepare to raise  rates, and strong changes directly indicate a future jump in inflation.

The rate increase, of course, strengthens the pound, so the big banks and funds can place large positions in advance pending orders at attractive levels entry if the index shows a significant acceleration.

The dynamics of the exchange rate can be tracked by discrepancies in actual and forecast data – if exceeded, it is perceived as a signal of acceleration of the economy. If the data turns out to be worse than forecasts – we should expect possible stagnation. In the latter case, the pound sterling may show a significant weakening, if the positions are strengthened for some reason US Dollar.

The index is necessarily considered together with the indicators of the service sector, since it occupies about 60% of the UK GDP.

Investors also pay little attention to the Industrial Production index due to export dependence on the supply of raw materials (there are few minerals produced in the country), which suggests a deeper analysis of the reasons for the decline or rise in data.

The high share of state income from financial services has turned the industry into an industry with a large number of backward industries, which slows down the growth of production. Consumers prefer to cover their needs at the expense of imports, rather than support a "domestic manufacturer".