UK manufacturing orders at 10-month high

UK factory orders hit a 10-month high in June but Brexit jitters offset the boost from a weaker pound, according to new figures.

The latest UK CBI Industrial Trends Survey found the order book balance improved to minus 2 this month from minus 8 in May, marking the best reading since last August.

The survey of more than 480 manufacturers reported that the strengthened order books in the three months to June were led by the food and drink, and motor vehicles and transport sectors.

But it found that export orders remained unchanged in June, with a balance of minus 14 despite the recent drop in the value of the pound.

Rain Newton-Smith, chief economist at the CBI, said: "The recent fall in the pound appears to have done little for our exporters.

"It may be that the growing uncertainty in the run-up to the EU referendum, combined with global risks elsewhere, has offset some of the benefits of a weaker currency at this time.

"But while British manufacturers had a tricky start to the year, there are more positive signs as output and demand stabilise."

It follows a better-than-expected performance on the high street, signalling that fears of a slowdown in the run-up to the EU referendum may have been overdone.

Official figures last week revealed a surprisingly strong 0.9% rise in retail sales during May.

Howard Archer, chief UK and European economist at IHS Global Insight, said recent robust economic figures suggest UK growth may even pick up to 0.5% in the second quarter from 0.4% in the first three months.

He had previously forecast a sharp slowdown to as low as 0.2%.

But the Bank of England last week warned that referendum uncertainty was hitting some areas of the economy, impacting the housing market and car sales as households and businesses put off major spending decisions.

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