Inflation beast still slumbering say manufacturers. 

The Bank of England should continue to ignore premature calls for a rise in interest rates, according to Britain’s manufacturers.

Despite publishing figures earlier this week showing manufacturing indicators at their best level for ten years, EEF, the manufacturers’ organisation, believes that much of this growth is based on exports, while domestic demand remains more subdued.

In addition, while rising costs might point to growing inflationary pressures, rising productivity and more intense competition both mean that they are not feeding through into actual inflation.

EEF Chief Economist, Steve Radley, said:

“While there has been lots of noise about inflationary pressures, the beast itself is still slumbering. The MPC should not act until they see convincing evidence of it waking up”.

Commenting on today's manufacturing output figures, SMR said:

"We shouldn't read too much into the monthly figures which are notoriously eratic and likely to be revised. Both the three- and twelve-month year-on-year figures are still positive and back our view of an outlook which continues to improve for manufacturing."