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FTSE flat after sharp fall in production heightens recession fears
by Sarah Miloudi on Mar 12, 2013 at 10:24
The FTSE 100 opened flat ahead of a sharp decline in industrial production data that raised the risk of recession.
January’s UK industrial and trade report suggests Britain's fragile economy is still struggling to rebalance, heightening the risk of a further contraction in growth.
Industrial production fell by 1.2%, reflecting a 1.5% fall in manufacturing output.
Capital Economics' Samuel Tombs said the risk of a pull back in growth remained 'high', even if the latest set of numbers only reversed December’s gains.
It is the first set of serious economic data since the US posted its expectation beating jobs numbers, and traders said investors were watching closely the latest industrial and manufacturing news in the UK and looking for signs recent optimism was about to evaporate.
After weeks of strong trading, investors in the UK and Europe were far more cautious this morning. The FTSE 100 opened at 6,503 adding just 0.13% by 10am, and it was a muted open for Europe too.
Spreadex's Shavaz Dhalla, a financial trader, said markets had 'finally started to show signs investors can no longer push key resistance levels.'
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