A survey has shown that Britain's manufacturing sector shrank at its slowest pace in eight months in April, as the weak sterling helped support new orders.
The CIPS/Markit manufacturing purchasing managers' index improved to 42.9 in April from an upwardly revised 39.5 in March. Analysts had expected a more modest improvement.
The headline index is the highest since last August, although it has been below the key 50 level which separates growth from contraction for more than a year.
The survey showed an improvement in most of the 11 categories, with new orders and export orders showing particularly big increases. The new orders index rose to 46.3 in April from an upwardly revised 39.4 in March - the biggest jump in the index since 1996 and marking the slowest rate of contraction since last April.
The export orders index rose to its highest since last March at a whisker below 50 in its biggest increase since CIPS started polling for this information in 1996. 'The sterling exchange rate was the main factor boosting competitiveness abroad,' the survey said.
The pound has lost nearly a third of its value against other major currencies over the last 18 months and policymakers have been counting on exports to help lift Britain out of recession.
Britain's economy contracted by 1.9% in the first three months of this year and is expected to suffer its sharpest downturn this year since World War Two, although some policymakers reckon the worst of the decline may be over.
The survey showed that over one third of manufacturers cut jobs last month, although the pace of decline in employment levels was its slowest since last November.
It also showed that inflationary pressures abated, with the input prices index hitting its lowest since February 2002, while the index gauging factory gate inflation fell to its lowest since records for that information began in 1999.
Meanwhile, the Bank of England says British mortgage lending grew by less than half as much as expected in March, while mortgage approvals were also slightly below forecast.
Its figures showed that mortgage lending rose by £757m in March, less than half the £1.6 billion rise expected by analysts and the weakest rise since August 2008. Approvals for home loans were also slightly weaker than forecast at 39,230, although this was the highest since May 2008.
