British factory order books deteriorated in June at their fastest pace for almost two years, a survey showed today.
The Confederation of British Industry said its monthly manufacturing order books balance fell to -25 in June, its lowest since October 2003. That compared to -22 in May and forecasts of -21.
"Demand is subdued across the manufacturing sector with all the main industry groups reporting that order books are below normal," said Nick Brayshaw, chairman of the CBI manufacturing council.
Short sterling interest rate futures rose after the survey as it further boosted expectations that the Bank of England would cut interest rates from their current 4.75 per cent in the coming months.
Companies expected output to fall over the coming three months, with the output expectations balance dropping to its lowest level since December to stand at -5 from -1 in May.
Export order books also remained well below normal, the CBI said. Despite higher oil and metal prices, manufacturers expected prices to fall at the factory gate in the coming months, with that balance falling to -6, its lowest since March 2004.
The CBI said oil prices were 46 per cent higher than a year ago, and that metals prices were up 17 per cent on the year. The survey was done between May 26th and June 16th.