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UK factory orders growth hits record, inflation climbs too

Published 24/11/2021, 11:06
© Reuters. FILE PHOTO: Technicians work on a Rolls-Royce engine prior to it being installed in a car on the production line of the Rolls-Royce Goodwood factory, near Chichester, Britain, September 1, 2020.  REUTERS/Peter Nicholls

LONDON (Reuters) - British industrial orders surged this month with a growth measure hitting its highest since at least 1977 and price expectations among manufacturers also climbed to a 44-year high, according to a survey published on Wednesday.

The survey is likely to add to unease at the Bank of England about growing inflation pressures ahead of the British central bank's announcement on Dec. 16 about whether it is raising interest rates from their pandemic lows.

The Confederation of British Industry's monthly manufacturers' order book balance leapt to +26 in November from +9 in October, well above the average forecast of +13 in a Reuters poll of economists.

The reading was the highest since the CBI series started in April 1977.

"It's good to see strong order books and output growth in the manufacturing sector holding up as we head into winter," CBI deputy chief economist Anna Leach said.

Expectations for output growth remained strong, dipping only slightly from October's three-month high.

© Reuters. FILE PHOTO: Technicians work on a Rolls-Royce engine prior to it being installed in a car on the production line of the Rolls-Royce Goodwood factory, near Chichester, Britain, September 1, 2020.  REUTERS/Peter Nicholls

"But intense supply side challenges continue to put pressure on firms' capacity to meet demand," Leach said.

The CBI's measure of price expectations in the next three months climbed to +67 from October's +59, the highest since May 1977 as stock levels of finished goods dwindled to the lowest on record, reflecting global supply chain problems and strong demand.

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