U.K. manufacturing continues to benefit from the weaker pound, the Confederation of British Industry said in a report published on August 21.
While overall growth eased slightly in August, output and orders expanded at a pace above the long-term average.
Exporters, aided by the currency’s depreciation since the Brexit vote, are doing especially well. Export orders “remained strong,” the CBI said.
Manufacturing expanded in 13 sectors out of 17, with food, drink and tobacco giving the biggest boost to growth.
Industry expectations of output prices for the next three months rose. While price prospects are “comfortably below” January’s peak, they remain historically high, the CBI said.
Bank of England policy makers decided to unanimously to raise the benchmark interest rate to 0.75% at the beginning of August.
The central bank estimates that the economy is growing fast enough to generate inflation pressures and that a series of limited and gradual rate hikes will be needed to keep prices in check.
By Karoliina Liimatainen