U.K. industrial production unexpectedly fell in January as factory output slumped, fueling concerns that Britain may slip into a triple-dip recession.

Production fell 1.2 percent from December, when it jumped 1.1 percent, the Office for National Statistics said today in London.

The median forecast in a Bloomberg News survey of 29 economists was for a 0.1 percent increase. Manufacturing also unexpectedly declined, by 1.5 percent. The pound fell.

The U.K. economy shrank in the fourth quarter and the Bank of England has forecast that growth will remain weak in the near term.

As manufacturers battle a continued slump in the euro area, the U.K.’s biggest trading partner, as well as lackluster demand at home, today’s data have fueled concern the economy will fall into its third recession in five years.

“A dire set of U.K. data,” said Ross Walker, an economist at Royal Bank of Scotland Group Plc in London. It leaves a decline in first-quarter gross domestic product looking more likely than not. Sustainable recovery and macroeconomic rebalancing feel as distant as ever.”

The drop in manufacturing output in January compared with economists’ forecast for an unchanged reading.

The statistics office said respondents to the survey didn’t cite heavy snowfalls that month for the slump. Nida Ali, economic adviser to the Ernst & Young ITEM Club, said it may partly reflect the impact of the “sharp” increase in December.

(Bloomberg)