The manufacturing slump is over in the UK and the sector is now expanding rapidly, the Confederation of British Industry(CBI) has said in yet another sign the Bank of England will raise interest rates next week.
The CBI's quarterly industrial trends survey today showed manufacturers' optimism rising for the first time in 18 months in January to hit its highest level since April 2002.
Order books rose at the fastest pace since October 1996 before the rise in the pound help send British manufacturing into a seven-year slump. Output increased for the first time in three years and at the strongest rate in eight.
"This is a significant turning point," said Mr Ian McCafferty, chief economic adviser at the CBI.
"Manufacturing is joining the party we have seen in other parts of the economy."
Economists said the survey results should be mark the end of any lingering belief that the Bank of England's Monetary Policy would not raise borrowing costs at its February meeting in a week's time.
Expectations of a hike had already reached fever-pitch last week after official figures showed the economy was roaring ahead at the end of last year and retail sales jumped by nearly one percent in December alone.
Even the CBI, not normally an advocate of higher borrowing costs, admitted that rates will have to go up over the course of the year and that it would not be unhappy with a quarter-point hike to 4.0 percent next week.