Britain's manufacturing sector expanded at a slightly weaker pace than expected in December, a new report said today.
The Chartered Institute of Purchasing and Supply/RBS survey of manufacturing showed that export orders grew at their weakest pace in seven months, although overall orders growth remained buoyant.
According to the survey, surging energy and materials costs drove input prices to a nine-month high.
The headline purchasing managers' index (PMI) inched up to 51.1 in December - below the 51.2 expected by analysts - from 51.0 in November, keeping above the 50.0 threshold separating expansion from contraction for a fifth month.
Economists said that, overall. the figures offered few surprises and did not alter the outlook for interest rates, which are expected to remain steady for now at 4.5 per cent - although most analysts predict the next move will be down.
The survey also showed UK manufacturing output growth slowed to show a reading of 53.3 in December from 53.8 in the prior month.
A similar poll of manufacturing in the 12-member euro zone showed a stronger pickup in growth and the first expansion in employment in more than four years. That stood in contrast to continued net job losses in UK factory employment.
Rising energy and raw materials costs drove up input prices to their highest since March, with an index reading of 61.9 after an upwardly revised 59.0 in November, while output prices hit a three-month high of 52.2.
Cost pressures also prompted many firms to lay off staff, with the employment index showing a reading of 46.9 - the ninth successive month below 50.0.
Although total new orders improved, with an index reading of 53.2 from 52.3 in the previous month, export orders eased to 50.8 from 53.3 in November - their lowest since May - due to a slightly stronger pound.