INTEREST Rate Hikes Slow Manufacturing Recovery
The Scotsman - Edinburgh,Scotland,UK

July 26, 2004
The Scotsman - Edinburgh
A series of interest rate hikes has contributed to a slowing in the UK manufacturing recovery, figures showed today.

Although the data did not suggest the upturn had come to an end, it revealed that the pace of demand and output growth eased in the three months to the end of July.

The quarterly industrial trends survey from the business lobby group CBI also showed that rising oil and commodity prices had pushed up costs at the fastest rate for more than eight years.

Some 27% of manufacturers said total order books were up over the quarter, but 25% said they were down. The balance of plus two per cent was a sharp fall on the previous quarterly survey in April.

Ian McCafferty, chief economic adviser at the CBI, said: “The pace of the upturn has eased but in no sense are we witnessing the end of the manufacturing recovery.”

Other recent studies have shown a slight slowing in the rate of recovery, while official figures have contradicted this by showing growth in manufacturing output.

The survey, which was released a day ahead of schedule, comes amid expectations that the Bank of England will next week increase interest rates for a fifth time since November.