Industrial production was a little firmer than expected in November. A 0.3 percent monthly rise was just a tick more than the market consensus but followed a hefty downward revision to October which now shows a 1.3 percent decline. This was the first rise in output since June but only enough to lift annual growth from minus 0.5 percent to minus 0.1 percent.

Manufacturing performed marginally better, posting a 0.4 percent monthly gain but this only dented October's revised 1.2 percent slump. This was also its first advance in four months and reflected growth in nine of the 13 subsectors amongst which pharmaceuticals (4.8 percent), food, drink and tobacco and coke and refined petroleum products (both 1.4 percent) stood out.

Elsewhere, total industrial production was boosted by a 2.2 percent jump in oil and gas extraction and a 0.2 percent increase in electricity and gas but hit by a 1.0 percent fall in water supply and sewerage.

The latest data leave overall industrial production down 1.5 percent in the latest three months and all but guarantee that the sector will weigh on fourth quarter GDP growth. Absent any revisions, December will need a monthly spurt of fully 4.0 percent just to hold the quarter flat. Today's updates put the UK RPI at 21 and the RPI-P at 16. Both readings show a moderate degree of overall economic outperformance making no change in Bank Rate at the BoE's MPC meeting next month all the more likely.

Overall production is seen rising 0.2 percent versus October while manufacturing output is expected to advance a marginally stronger 0.3 percent.

Industrial production measures the physical output of the mining and quarrying, manufacturing, gas and electric, and water supply and sewerage sectors. Manufacturing is seen as the best guide to underlying developments as the other subsectors can be highly volatile on a short-term basis. Estimates are largely based on a monthly business survey of roughly 6,000 companies.

Industrial and manufacturing outputs are watched carefully by market participants despite the decline in the importance of manufacturing in the UK economy. Manufacturing output is the preferred number rather than industrial production which can be unduly influenced by electrical generation and weather. The manufacturing index is widely used as a short-term economic indicator in its own right by both the Bank of England and the UK government. Market analysts also focus on manufacturing and its sub-sectors to get insight on industry performance.

Industrial production accounts for less than 16 percent of the economy within which the key manufacturing sector is worth about ten percentage points. Total manufacturing is divided into thirteen sub-sectors, ranging from food, drink and tobacco through chemicals and chemical products to electronics and transport equipment. Consequently, this report has a big influence on market behavior. In any given month, one can see whether capital goods or consumer goods are growing more rapidly. Are manufacturers still producing construction supplies and other materials? This detailed report shows which sectors of the economy are growing and which are not.

Investors want to keep their finger on the pulse of the economy because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more subdued growth that won't lead to inflationary pressures. By tracking economic data such as industrial production, investors will know what the economic backdrop is for these markets and their portfolios.