A survey has shown that British factory activity slowed slightly last month, but price pressures remained strong.
The CIPS/NTC purchasing managers' index eased to 54.3 last month from a downwardly revised 54.7 in May. Any figure above 50 indicates growth.
News of a marked pick-up in raw materials costs alongside signs that manufacturers remain confident about raising their prices will come as a worry to Bank of England policymakers, who have raised interest rates four times in less than a year to curb inflation.
The index of input costs jumped to a nine-month high of 65.7, while the output prices index eased slightly but remained high at 56.8.
There were signs that UK domestic demand is subsiding, with the total new orders index slipping to 54.7 from 55.5 in May to reach its lowest since January. But the strong sterling does not appear to have dented demand for British goods abroad, with the export orders index rising to 54 from 53.6.
Firms continued to take on staff last month, albeit at a slower pace than in May, with the employment index easing to 51.
Meanwhile, a similar survey showed that manufacturing activity in the euro zone grew by more than expected in June after slumping in May.
The seasonally adjusted PMI compiled by NTC Research rose in June to 55.6 from 55 in May. After hitting a 15-month low in May, the overall improvement in June comes despite rising interest rates, a strong euro and falling demand in some of Europe's biggest export markets.
