U.K. industrial production likely to have risen 2.9 pct y/y in December

UK industrial production figures due Friday will be in the spotlight. After growing by a stronger-than-expected 2.1 percent on the month in November, it is to be seen if U.K's industrial sector extends momentum into the year-end. Analysts expect data to reveal some payback after the very strong November print.

Oil and gas production surged as the Buzzard oil fields (one of the U.K.’s largest) came back on line after an extended shutdown. The U.K. Office for National Statistics had said last month that November industrial production was fueled by North Sea oil and gas output.

Year over year, overall IP was up 2.0 percent, compared to the 0.9 percent decline in October. Manufacturing output also boosted overall production, which was up 1.3 percent, driven by sectors including pharmaceuticals, electrical equipment and transport. On a year-ago basis, the manufacturing sector grew by 1.2 percent.

Most economists expect the U.K. economy to lose speed through 2017 as accelerating inflation squeezes consumer spending. For December, the consensus expects slower growth for industrial and manufacturing production as warmer weather more than likely hampered output in the energy sector. Wells Fargo forecasts 2.9 percent year-over-year growth compared to 2.0 percent in the previous month.

"While the latest survey evidence had been largely upbeat, going forward demand for capital goods was expected to be constrained by "slowing UK economic activity and by mounting uncertainties over the Brexit process," Dr.Howard Archer, chief European and UK economist at IHS Global Insight said in a research report sent to clients.