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UK business orders and confidence strong, but price rises ahead

British manufacturers have reported strong order books and improved confidence, but also warn of higher prices in 2017.

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UK business orders and confidence strong, but price rises ahead

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British manufacturers say their order books are bulging and are at their best levels in nearly two years, but at the same time companies revealed plans to push up their prices sharply from the start of the new year.

The latest monthly industrial orders survey by the Confederation of British Industry showed the price hikes are because of the fall in the value of the pound against other currencies following the vote for the UK to leave the European Union, which has made imported raw materials more expensive.

Britain’s economy has defied expectations of a sharp slowdown following June’s referendum and forecasters, including those at the Bank of England, have raised their predictions for growth next year.

Business confidence boost

Another survey showed improved business confidence in Britain in November but it was still not at the level it had reached before the Brexit vote.

The survey of 500 executives showed a “notable increase” in capital investment planned for the coming year.

It was carried out by the polling firm YouGov and the Centre for Economic and Business Research (CEBR), a think tank.

“To date, businesses are proving quite resilient in the face of what has proved to be an economically and politically tumultuous six months for the UK,” Scott Corfe, CEBR director, said.

“Although many forecasters believe growth will slow next year, organisations themselves have a relatively bright outlook and are prepared to invest over the coming 12 months,” he said.