British Industrial Production, Manufacturing Production Fall in July

England's economy showed further signs of recession in July as industrial production and manufacturing production both fell in June, signaling that the economy continued to contract. However, the data might be weak as factories shut down for the Olympic Games, being hosted in London but being played across Great Britain. Also, there could have been some seasonal factors such as summer shutdowns of factories weighing on the data.

Industrial production fell in England 2.5 percent in July, slower than the 1 percent rate of expansion seen in June. However, the data beat economist expectations of a 3.4 percent drop in industrial production in July. On an annualized basis, industrial production fell 4.3 percent from the year before, slower than the previously reported annualized rate of a 1.8 percent contraction but better than economist expectations of a 5.0 percent drop.

The drop in industrial production is mirrored in the drop in manufacturing production in July. Manufacturing production fell 2.9 percent in July, well below the 1.2 percent rate of growth seen in June. However, the data also beat economist expectations of a 4.1 percent drop in production.

The slowdown in output does not bode well for England's economy. However, the Olympic Games may be to blame, as factories shut down to due to the mass influx of tourists at the end of the month. Also, July generally sees factories shut down for summer breaks, and so some of the month-over-month drop could be explained by that.

England is officially back in recession following multiple quarters of negative GDP growth and further declines are expected in the third quarter. Weighing on the economy are austerity measures from budget cuts and a prolonged slowdown in the Eurozone. Exports to Eurozone countries have fallen as final demand in the single currency zone falls.

British stocks fell on the weak data, with the benchmark FTSE 100 falling on the news. However, it has since recouped losses and rose 0.11 percent as of writing.