A survey has shown that growth in Britain's manufacturing sector slowed in April, as expected, but there was no let-up in inflationary pressures.
Evidence that companies are passing on surging raw material costs to customers may concern the Bank of England.
The CIPS/NTC purchasing managers' index slipped to 51 in April from 51.3 in March. Although marginally above economists' forecasts, it was the weakest reading since January and the second weakest in the past two years. Any reading above 50 means growth.
The output price index - which measures how much companies charge for their products -rose to 61.9 from 60.6 in the previous month. Output price inflation has scaled a fresh series high every month of 2008 so far.
The input price index rose to 78.5, the second highest reading in the survey's history, from 76.7. Companies indicated that sterling's weakness against the euro was increasing the cost of imported raw materials.
Manufacturing new orders declined for a fourth month, with export orders falling at an even faster rate than domestic orders, suggesting any boost from a weaker sterling is being more than offset by weaker global growth.
