UK factories expect to raise prices by most since last May, CBI says

By Thomson Reuters Mar 22, 2024 | 6:07 AM

LONDON (Reuters) – British manufacturers increased their expectations for selling prices for a third month in a row to the highest level in almost a year as Red Sea shipping disruption hurts supply chains, an industry survey showed on Friday.

The Confederation of British Industry’s monthly order book balance improved only marginally to -18 in the three months to March from -20 in February, remaining below a long-run average of -13.

Expectations for average selling prices in the next three months rose to +21 from +17, the strongest reading since May last year.

The Bank of England is watching inflation pressures closely as it considers when to start cutting interest rates.

As well as the Red Sea shipping problems, expectations of prices over the next three months were pushed up by higher oil prices and signs that the global industrial cycle was beginning to turn upwards after a difficult couple of years.

CBI deputy chief economist Anna Leach said it was disappointing to see output volumes fall in early 2024, despite last month’s expectations for a slight upturn.

“But manufacturers remain optimistic that conditions will improve in the quarter ahead,” Leach said.

The survey’s measure of output expectations for the next three months increased to +8 from +4 in February.

(Reporting by William Schomberg; Editing by Suban Abdulla)