British manufacturing firms' order books held close to a 30-year high in the three months to December, while a majority expect prices to rise in the coming months, according to data from the Confederation of British Industry.
Output growth held ground above its long-run average and prices in the next quarter are expected to rise at the fastest rate since June, according to the CBI's monthly industrial trends survey.
The survey results, based on responses from 371 manufacturers, showed that 14 out of 17 sub-sectors of the industry noted above normal order books, with the highest numbers seen in motor vehicles and transport equipment, and mechanical engineering sectors. Export order books dipped slightly from November's record high, but remained at their strongest level since the mid-1990s, the report added.
"While the lower level of sterling continues to support exporters, cost pressures remain intense," Anna Leach, CBI head of economic intelligence, said.
A 29% majority of firms see prices rising in the coming three months, compared to 6% predicting a drop, the survey said.
The Bank of England hiked interest rates for the first time in a decade in November, citing concerns over U.K. inflation running at around 3%, well above the central bank's 2% target.
Around 28% of surveyed firms reported order books in the final quarter were above-normal, compared to 11% posting below-normal numbers, while 28% said export order books were above-normal and 12% found them below-normal in the period.
Regarding the volume of output over the past three months, 42% of businesses said it was up and 11% reported that it was down. A quarter of firms forecast volumes to increase in the quarter ahead, compared to 13% expecting a decline.