U.K. Factories Rein in Price Expectations From a 34-Year High

(Bloomberg) -- U.K. manufacturers scaled back their expectations of output prices in February as the pound gained.

Expected prices, production and export orders are still well above long-term averages, though have slipped from the highs seen at the end of last year, the Confederation of British Industry reported on Tuesday. The measure of average prices seen in the next three months fell to 25 from 40, the highest since 1984.

The pound has appreciated more than 3 percent this year against the dollar, curbing the cost of imported goods and taking some of the edge off what the Bank of England has called a “sweet spot” for exporters. The 2016 decision to leave the European Union pushed the currency lower, but trading arrangements have yet to change.

Output increased in 16 out of 17 manufacturing sectors, led by food, drink and tobacco, and transport equipment, the CBI said. Respondents to the survey of 397 manufacturers, conducted between Jan. 26 and Feb. 13, expect production to slow somewhat in the next three months.

To contact the reporter on this story: Brian Swint in London at bswint@bloomberg.net.

To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Andrew Atkinson, Lucy Meakin

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