The price of manufactured goods is set to rise in the coming months.

A recent survey of businesses by the Confederation of British Industry (CBI) has revealed that the price of manufactured goods is set to rise in the coming months – even though company order books are ‘below normal’ and overall sector growth has slowed.

The CBI has attributed the increase in prices to the rise in oil costs, the cost of food, the rise in metal prices and the fall of the sterling’s strength against the US dollar.

Ian McCafferty, CBI’s Chief Economic Adviser, explained: “It is clear from the pricing data in the survey that manufacturers are really feeling the impact and having to pass their increasing costs on. Oil prices rose more than 75% over the last year, and 14% in the past month alone. These rising inflationary pressures make it ever more unlikely that we will see the cuts in interest rates expected by the markets only a few weeks ago.”

The leading business organisation has stated that makers of intermediate goods, such as energy and commodity industries, will continue to expect the highest rate of price inflation.

However, the CBI’s President, Martin Broughton, has offered reassurance that the UK economy is “strong enough to weather the storm”. Speaking at the CBI’s annual dinner, he said: “British business has enjoyed a remarkable period of sustained growth – and though it may be slowing it does not look like stopping. Industrial and commercial Britain as a whole is in sound financial shape.”