London — UK manufacturing shrank for the first time in 11 months in February, led by output of machinery and equipment. The drop brings to an end an unprecedented run for manufacturers that helped underpin the economy as a squeeze from rising prices took its toll on consumer spending. Factory output declined 0.2% — missing expectations for a 0.2% increase — after stagnating in January. Overall, industrial production rose a smaller-than-forecast 0.1%, with the growth largely due to below-average temperatures boosting demand for energy. Pantheon Macroceconomics expects a stronger production figure in March, but says it won’t be enough to offset weakness in retail and consumer activity and construction, all of which took a hit from the "Beast from the East’’ snowstorm. Economist Samuel Tombs says GDP growth may be weaker in the first quarter than the Bank of England has estimated, which casts doubt on whether a May interest-rate increase is as likely as market pricing suggests. The pou...
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