UK manufacturing output rose at its fastest rate in 18 months in July, helped by a sharp pick up in car production, official figures show. The Office for National Statistics (ONS) said factory output rose by 0.9% from June – three times what analysts had forecast. However manufacturing output was down by 10.1% on a year earlier. The July figure was revised upwards from 0.5% to 0.6%, but the ONS said it would have little impact on GDP. The manufacture of motor vehicles rose 10.4% in July from June – and was one of the main reasons for the rise in manufacturing output. Retail woes The strength of the figures was a “welcome surprise” said Brian Hilliard, an analyst with Societe Generale, adding they signalled the UK would be returning to growth in the third quarter of 2009. Earlier, figures showed retail sales fell in August after two months of increases, casting doubt on a prolonged recovery in High Street consumer spending. UK like-for-like sales – which do not include new stores – fell 0.1% compared with the same month last year, said the British Retail Consortium (BRC). Capital Economics analyst, Jonathan Loynes said these figures were a reminder that “while improving overseas conditions are helping the export-dependent industrial sector to recover, the domestic economy still has plenty of problems to overcome”.