A survey has shown that British manufacturing activity slowed in April as expected, but price growth rebounded to near record levels.
The CIPS/Royal Bank of Scotland Purchasing Managers' Index fell to 53.9 in April from a downwardly revised 54.2 in March.
The data are unlikely to alter expectations the Bank of England will raise interest rates to 5.5% 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.
Meanwhile, there were signs that a stronger sterling, which last month breached the $2 level for the first time in 16 years, may be taking its toll on foreign demand for British goods. The export orders index slipped to 53.7 in April from 55.5.
