Britain's manufacturing sector picked up pace unexpectedly last month, a survey showed today.
The Chartered Institute of Purchasing and Supply/NTC said its purchasing managers' index rose to 54.4 last month, well above the 50 divide between growth and contraction, from a downwardly revised 52.8 in October. Analysts had forecast a fall to 52.5.
Sterling leapt as the surprisingly strong reading eased expectations of a cut in interest rates from the Bank of England's monetary policy meeting this week.
The figures tally with a survey from the Engineering Employers' Federation (EEF) that showed manufacturers enjoyed healthy growth in the final quarter of the year.
The EEF survey showed output and orders held well above their long-run average and that investment intentions in the sector remained firm despite turbulence credit markets.
Manufacturing activity in the euro zone also picked up pace in November, recovering from October's 26-month low.