Surprise slump in UK manufacturing - as it happened

• US markets open higher
• NIESR: UK growth halved to 0.3% in Q1
• Plunge in steel production weighs on UK manufacturing
• Japan's finance minister addresses yen surge
• German exports rebound more than expected
• Oil prices rise above $41 a barrel
• UK trade deficit wider than expected

3.04pm BST

That's it for today folks. Thank you for reading the blog and please join us again on Monday. Have a lovely weekend.

3.00pm BST

UK growth halved in the first quarter to 0.3% according to the National Institute of Economic and Social Research.

The think tank said that a poor performance from Britain's manufacturing sector was acting as a drag on the economy, which grew by 0.6% in the final quarter of 2015.

The subdued growth in the first quarter of 2016 has been primarily driven by weakness in production industries, especially manufacturing.

The volume of industrial production is currently 10.7% below its pre-recession peak of the first quarter of 2008, while GDP has now surpassed its pre-recession peak by 7%.

2.56pm BST

The European Council has confirmed that it will delay its June summit for five days so that it does not clash with the UK's Brexit referendum.

The council will now meet on 28-29 June, and not 23-24 June as originally planned. The UK will vote on whether or not to remain in the EU on 23 June.

2.32pm BST

As in Europe, US investor sentiment is being helped by rising oil prices and Janet Yellen's upbeat comments about the US economy.

2.26pm BST

Brent crude oil is now up 4.9% or $1.95 at $41.38 a barrel.

Investors appear to be hopeful that the world's top producers will agree to freeze output, and traders were encouraged by Janet Yellen's comments last night.

1.49pm BST

Copper prices are heading for their biggest weekly loss in three months because of concerns over lack of global demand and plenty of supply in China.

Risk-off (sentiment) has weighed on cyclical commodity markets. Copper supplies are set to remain ample as producers are focusing on cutting costs rather than production.

1.31pm BST

Back to Japan...

Currency strategists at UBS believe April's Bank of Japan meeting will be "make or break" for the yen.

Our Japanese economists do indeed expect further aggressive easing in April in the form of expanded quantitative easing and further rate cuts, without which we would need to trim our forecast of USD/JPY rising to 122 by year-end.

12.15pm BST

According to Reuters, EU leaders are planning to reschedule their regular June summit for after the referendum, to give them time to react to a potential Brexit.

12.02pm BST

Larry Elliott, the Guardian's economics editor, has given his verdict on the UK manufacturing and trade data:

UK economy is using low interest rates as life support. It can't end well

11.44am BST

A couple of graphs to illustrate Friday's UK data...

11.22am BST

Commenting on the UK trade figures, the British Chambers of Commerce said it was concerning that exports fell in the last three months while imports rose.

David Kern, the BCC's chief economist:

These figures reinforce our view that much more is needed to boost our export performance. This must include a greater emphasis on helping firms to break into new and growing markets.

10.34am BST

The pound has fallen back below $1.41 following the weak manufacturing data and wider than expected trade gap.

10.21am BST

Separate data on the UK's exports and imports showed the trade deficit was wider than expected in February as imports from the EU rose to a record high of 20bn.

10.11am BST

The FTSE 100 is still rising, up 0.6% or 40 points at 6,176...

10.10am BST

"Miserable". That is what Alan Clarke, economist at Scotiabank, thinks of the industrial production data.

Manufacturing was the big drag on industrial production (which also includes mining and utilities), and iron and steel production was the biggest drag on manufacturing (down 37.7% over the year to Feb).

While the data did not make pleasant reading, crunching these numbers still leaves us on track for 0.5% q/q GDP growth during Q1 barring a disaster in the services sector.

Manufacturing should have a better time once the effects of the weaker pound feed through, as long as pre-brexit vote uncertainty doesn't get in the way.

9.59am BST

The UK manufacturing data is a big disappointment and will raise fears that the UK recovery is wavering.

The 1.8% annual fall in manufacturing output is the biggest since July 2013.

UK manuf drop of 1.1% much worse than 0.2% drop fcast by econs in Rtrs poll. Crude steel output lowest since Dec'08 https://t.co/LkzTLpucRh

9.36am BST

Bad news for UK manufacturing, with output down 1.1% in February - much more sharply than the 0.2% drop forecast by economists.

That means manufacturing output was down 1.8% on annual basis in February.

9.17am BST

Japan's finance minister Taro Aso said on Friday that he was watching currency moves with "tension" after the yen hit a 17-month high of 107.6 against the dollar.

8.41am BST

Brent crude oil is up 2% this morning at $40.22 a barrel.

Investors are holding their nerve in what has been a jittery, volatile week. Comments from Fed chair Janet Yellen in the US last night were fairly upbeat about the US economy, helping sentiment.

8.31am BST

Europe's main stock markets are all up in early trading, with investors no doubt relieved that the German trade data surprised on the upside.

The FTSE is up 0.8% or 51 points at 6,187.81.

8.16am BST

Carsten Brzeski, economist at ING, is not overly impressed by Germany's stronger than expected export performance in February.

This is what he had to say about the news that exports in Europe's largest economy rose by 1.3% over the month - the biggest increase since September.

Some relief but no reason to cheer. February trade data just showed that the German export sector still struggles to gain momentum.

German exports have lost parts of their magic and strength. In the past always a reliable growth engine, net exports on average did not contribute anything to quarterly GDP growth over the last two years. In 2015, net exports even were a drag on growth.

Looking ahead, it does not look as if exports would quickly return as a powerful growth engine. The tailwinds of the weak currency are fading away. Since late-November, the euro has appreciated by more than 6 % vis-i-vis the US dollar.

With strong consumption, a booming construction sector but stagnating industry and exports as well as a reprimand from international institutions to finally step up reform efforts, the eurozone's largest economy is losing some of its luster.

8.10am BST

Boost for #German Q1 #GDP #growth hopes as exports rise 1.3% seas. adj in Feb after 0.6% dip in Jan. Imports up 0.4% m/m in Feb (1)

German exports bounced in Feb. Jumped by 1.3% MoM, strongest increase since Sep widening trade surplus to a19.8bn. pic.twitter.com/IRiFeIXdQk

German exports rise at fastest pace since September (+1.3 pct) after months of lacklustre performance tied to emerging markets slowdown

8.05am BST

Good morning and welcome to our rolling coverage of the world economy, the financial markets and business.

Some brighter news for the eurozone this morning, following a week of largely disappointing data and a growing sense from the European Central Bank that 2016 is going to be another tough year.