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UK manufacturing output falls unexpectedly in April

UK manufacturing output fell unexpectedly in April, raising the risk of a longer recession.

The figures will pressure policymakers to take action to boost economic growth.

Manufacturing output dropped 0.7% in April after a 0.9% rise in March, according to the Office for National Statistics.

Britain is still suffering from the slump in the wake of the 2007-2009 financial crisis and slipped back into recession around the turn of the year as the euro zone crisis is hitting exports and is making companies reluctant to invest and hire.

The Bank of England shied away from injecting more cash into the struggling economy last week, but on Monday central banker Adam Posen called for further purchases of assets, focusing on loans to small and medium-sized companies.

The wider reading of industrial output, which includes energy production and mining, was unchanged in April after a 0.3% drop in March, but also below forecasts.

Gloomy outlook for UK's housing market.

Adding to a gloomy picture, the outlook for the British housing market worsened as the euro zone crisis deepened and sales took a temporary hit from the expiry of a tax holiday, while growth in permanent job placements slowed in May and employers said they expected to take on fewer new staff in the months ahead.

In another reminder of how closely Britain's economic fortunes are linked with continental Europe's, the Society of Motor Manufacturers and Car Traders said that the country could produce a record 2 million vehicles in 2015 provided the demand from the euro zone held up.

Finance minister George Osborne warned on Sunday the crisis in the euro zone was killing off the recovery in Britain, though even members from his own conservative party have called on him to take stronger action to boost growth.

However, Osborne's hands are tied by his pledge to erase the country's huge budget deficit, which is still around 8% of GDP. But the coalition government has promised to come up with further steps to unblock infrastructure spending.

Industrial output was dragged down in April by a drop in the manufacturing of basic pharmaceutical products and preparations, as well as in the category of other manufacturing and repair.

Moreover, a 13.6 percent monthly jump in electricity and gas output caused by the coldest April since 1989 was offset by a 6.4 percent fall in oil and gas extraction, due to the closure of a North Sea platform after a gas leak.