LONDON, Sept 2 Reuters British factories had their strongest month in more than two years in August as demand at home offset a fall in exports, according to a survey published on Monday that added to signs of momentum in the economy.

The SP Global UK Manufacturing Purchasing Managers39; Index rose to 52.5 from 52.1 in July, its highest reading since June 2022 and unchanged from a preliminary flash reading for August.

The upturn is broadbased across manufacturing, with the investment goods sector the standout performer, Rob Dobson, Director at SP Global Market Intelligence, said.

Demand for investment goods is often considered an expression of confidence in the economy by businesses.

As well as output and new orders, employment continued to grow.

Britain39;s economy has been stronger this year than expected by forecasters, including at the Bank of England, representing a favourable backdrop for the new government of Prime Minister Keir Starmer who is seeking to speed up growth.

The upturn continues to be driven by the domestic market, Dobson said, noting new business from overseas had fallen continuously since early 2022 due to weakness in Europe, China39;s slowdown, high shipping costs and global uncertainty.

Supply constraints and higher shipping costs were also driving up input prices which rose for an eighth month in a row, albeit more slowly than in July and June.

The BoE which says it cannot yet declare victory over inflation, especially in Britain39;s…