British manufacturing activity slowed in April as expected, but price growth rebounded to near record levels, a survey showed today.
The Chartered Institute of Purchasing and Supply/Royal Bank of Scotland Purchasing Managers' Index fell to 53.9 in April from a downwardly revised 54.2 in March. Analysts had predicted an easing to 54.
The data are unlikely to alter expectations the Bank of England will raise interest rates to 5.5 per cent next week, especially as the output prices index nearly matched an eight-year high hit in February.
Policymakers have been worried about firms' growing confidence in their ability to put up prices, and today's data will add weight to those concerns, given their struggle to tame inflation pressures.
The output prices index picked up to 56.8 in April, just shy of February's record 56.9 reading, from 55.5 in March. CIPS said the increase was partly in response to a rise in costs, with the input prices index at its highest level since October at 63.2.
Manufacturers increased output in April, with an index reading of 57.1 from 54.8 - the highest since September and marking the 22nd month of expansion. Firms took on fewer staff in April, however. The employment index fell to 50.5 from 51.2.