A survey has shown that British manufacturing activity accelerated unexpectedly in May, driven by the strongest growth in production in eight months.
The CIPS/NTC purchasing managers' index rose to 54.9 last month from an upwardly revised 54.1 in April. A reading above 50 indicates growth.
But the Bank of England is likely to be concerned to see the index measuring output price growth nudging higher to equal February's record of 56.9.
'This combination of rising inflationary pressures and strong growth continues. This may lead the Monetary Policy Committee to tighten monetary policy at a faster rate than previously anticipated,' said NTC economist Rob Dobson.
Manufacturers may be raising prices in response to the return of a pick-up in the cost of raw materials. The CIPS/NTC index measuring input price growth hit its highest since September, up to 64.8 in May from 63.3 in April.
