Oil spikes above $50 as factory output also rises
Market analysts are cautioning against hopes of a sustained uplift in activity but they are more optimistic about avoiding recession.
China’s slowdown has not been as severe as first expected and industry’s resilience follows a recent survey suggesting overseas property investors are not being deterred from Britain by the EU poll or by the prospect of a second Scottish independence as feared.
Industrial output rose 2% in April, the biggest month-on-month increase since July 2012, Office for National Statistics data showed.
Oil prices have again pushed above $50 a barrel with West Texas Intermediate trading at $50.5.
The rise in the oil price follows data showing a drawdown in US crude inventories, strong demand from China and Nigerian oil supply issues.
Mihir Kapadia, chief executive at Sun Global Investments, said: “China’s economic activity has not slowed as much as was initially feared – or at least not yet – with crude oil imports rising almost 40% from May of last year.
“This extra demand has boosted not only the price of oil, but also optimism that the world’s second largest oil consumer may be arresting its economic downturn – something which would be supportive for oil and other commodities.”
However, BNP Paribas economist Dominic Bryant said: “Our central expectation is that April’s spike corrects in May with a sharp fall, which would still mean that for Q2 as a whole manufacturing production growth is slightly negative.”