LONDON (Reuters) – More British manufacturers than at any point in the last 30 years reported rising costs last month, according to a survey on Wednesday that underlined pressure on the Bank of England to raise interest rates.
The IHS Markit CIPS UK Manufacturing Purchasing Managers’ Index (PMI) rose in November to 58.1 from 57.8 in October.
While revised down from a preliminary “flash” reading of 58.2, the survey showed a mostly improving picture for British manufacturers, marked by rising orders and employment.
But the PMI’s measure of factory costs, historically a good guide to official producer input price inflation, rose to the highest level since records began in 1992 as businesses struggled with global supply chain problems.
A Confederation of British Industry survey earlier this week showed costs rising at the fastest rate in over 20 years for firms in Britain’s services sector.
The BoE is keeping a close eye on gauges of cost pressure in the economy.
While it has said higher borrowing costs can do nothing to influence energy prices paid by businesses and consumers, some of its policymakers are concerned that high inflation could harm its credibility in the eyes of the public.
Earlier on Wednesday, a survey showed British retailers increased prices for the first time in more than two years in November as the pandemic’s hit to global supply chains and staff availability pushed up inflation for shoppers.
(Reporting by Andy Bruce; Editing by Catherine Evans)