Rain Newton-Smith, the CBI chief economist, said: “UK manufacturers are firing on all cylinders right now, with domestic orders up and optimism rising at the fastest pace in two years. “The weaker pound is driving export optimism for the year ahead, but is having a detrimental impact on costs for firms and ultimately for consumers.”
Official figures are likely to show that the economy continued to shrug off the impact of the EU referendum result during the final three months of 2016.
Although the chancellor, Philip Hammond, warned in Davos that rising inflation will mean slower growth in 2017, the CBI industrial trends survey found that manufacturers are becoming more optimistic about business conditions and the prospects for exports. The CBI said exporters’ competitiveness had been boosted by the fall in the value of the pound. More expensive imports are expected to eventually push up prices through their impact on business costs.