July 25 Reuters British manufacturers39; expectations for price rises in the next few months fell to their lowest since late 2020 and they ramped up forecasts for output too, a survey from the Confederation of British Industry showed on Thursday.

The CBI39;s gauge of average prices for the next three months dropped to 2 from 20 in June, the lowest reading since December 2020.

The survey added to signs of cooling price pressure in the economy ahead of the Bank of England39;s Aug. 1 interest rate announcement, although policymakers are worried by wage growth and services sector inflation.

New orders contracted at a faster rate in July, although manufacturers39; expectations for output rose at the fastest pace since March 2022.

The nearterm outlook for the sector remains positive amid an ongoing recovery in the wider UK economy, said Ben Jones, CBI lead economist.

While quarterly data from Thursday39;s survey showed a drop in business confidence over the past three months, Jones said it may prove to be a lull.

The share of manufacturers working below capacity has fallen sharply over the last quarter, feeding through to a more positive outlook for both hiring and investment.

Reporting by Andy Bruce; editing by David Milliken

Source Reuters