UK manufacturing output fell unexpectedly in August, official figures show, and the country’s trade deficit was worse than expected as the balance with countries outside the European Union deteriorated, official figures show.

However, oil and gas extraction jumped in August.

Monthly gross domestic product data published yesterday by the Office for National Statistics showed UK economic output stagnated during August, after upwardly revised month-on-month growth of 0.4% in July.

GDP during the June to August period was up by 0.7 per cent on the preceding three months, ahead of economists’ forecasts of a 0.6% increase, according to the ONS figures.

Howard Archer, chief economic adviser to the EY ITEM Club think-tank, raised his forecast of third-quarter growth to 0.6%, from 0.5%.

However, he highlighted the danger of a slowdown in growth in the fourth quarter amid Brexit and political uncertainties.

Mr Archer said: “We think there is a very real risk that growth will slow in the fourth quarter due to appreciable Brexit and political uncertainties weighing down on business investment and also limited willingness for companies to place major contracts. Additionally, still-stretched consumers may rein in their spending after seemingly splashing out at an increased rate over the third quarter.”

UK manufacturing output fell by 0.2% in August, ONS figures showed yesterday. Economists had forecast a 0.1% rise.

Broader industrial production, which includes mining and quarrying, oil and gas extraction and electricity, gas and water supply as well as manufacturing output, rose by 0.2%.

Industrial production was boosted by a 2.6% month-on-month rise in oil and gas extraction. This followed a 5.7% month-on-month surge in oil and gas extraction in July.

UK construction output fell by 0.7% in August, more than offsetting a 0.5% rise in July. The services sector stagnated during August, after a 0.3% rise in its output during July.

The UK’s global goods trade deficit came in at £11.2 billion in August, as imports rose by significantly more than exports. This marked a deterioration from an upwardly revised July deficit of £10.4bn and was worse than the £10.9bn figure for August forecast by economists.

The deterioration was driven by a worsening of the UK’s deficit on goods trade with countries outwith the EU, from £3.14bn to £4.22bn.

The UK’s deficit on trade in goods with other EU countries narrowed from £7.24bn in July to £6.98bn in August.

Mr Archer highlighted his view that the Bank of England’s Monetary Policy Committee, which has implemented two quarter-point rises in UK base rates since last November to take them to 0.75%, would hold off from further increases until after Brexit, given prevailing uncertainty.

He said: “Robust GDP growth in the three months to August, combined with a rise in [annual] consumer price inflation to a six-month high of 2.7% in August and tentative signs in July that earnings growth could finally be picking up would normally fuel expectations that it would not be long before the Bank of England raises interest rates again.

“However, it looks far more likely than not that the Bank of England will not raise interest rates again until after the UK leaves the EU in March 2019 given the major uncertainties that will likely continue to occur in the run-up to the UK’s departure.”

Mr Archer added: “The MPC will want to see sustained evidence that the economy is holding up in the aftermath of the UK leaving the EU before it raises interest rates again.”