Boom time for Britain!

With factory orders at 40-year high, it’s…

BUSINESS is booming at Britain’s factories as orders hit their highest level for more than four decades.

In a sign the UK economy is bouncing back following the pandemic, the Confederation of British Industry said manufacturing order books are at their strongest since records began in 1977, when Jim Callaghan was Prime Minister.

And in a further boost, research by HSBC found business confidence has returned to pre-Covid levels, with 80 per cent of UK companies expecting doubledigit growth over the next 12 months.

However, experts warned that the recovery in Europe is under threat from surging coronavirus cases and renewed lockdowns.

Germany, the biggest economy on the Continent, faces a winter of stagnation as business confidence collapses in the face of a fourth wave of Covid.

Julian Jessop, economics fellow at free market think-tank the Institute of Economic Affairs, said: ‘The UK economy is weathering the global supply problems and price shocks relatively well, despite the additional headwinds from Brexit.

‘The recovery in the UK has regained momentum over the last few months, even as major economies in Europe start to falter.

‘The UK’s policy of lifting Covid restrictions in July is proving to be the right decision both for public health and the

‘Entrepreneurial spirit of UK business’

economy.’ The comments came 24 hours after AstraZeneca chief Pascal Soriot said Europe’s failure to embrace its Covid vaccine may be to blame for the surge in hospitalisations on the continent.

But in Britain, the CBI said manufacturing orders were rolling in. Factories’ output kept rising at an aboveaverage pace, with 12 out of 17 sectors seeing growth.

HSBC’s research found one in four UK firms will have returned to pre-pandemic profit levels by the end of the year.

Ian Tandy of HSBC UK, said: ‘British businesses are firmly back in growth mode and are optimistic about 2022, testament to the innovation and entrepreneurial spirit of UK businesses.’

There were some concerns in the manufacturing data from the CBI as companies expect the prices of their goods to jump at the fastest pace since May 1977.

Demand for materials and components surged when manufacturers were released from their lockdown shackles. This has been worsened by rising shipping costs and delays, as disruption to global trade and closures at ports hit the flow of containers around the world.

Businesses, who have seen their costs soar over the past few months, are now planning to pass this burden on to consumers. This will add to inflation fears with households already facing tax rises and soaring energy bills.

Usually central banks would raise interest rates in an attempt to tame price rises, as this should encourage businesses and households to save ‘It’s good to see strong order rather than spend. But there books and output growth in are fears this could put the the manufacturing sector damper on Britain’s recovery. holding up.’ But she pointed Anna Leach of the CBI said: out that ‘intense’ supply issues meant firms were struggling to meet demand and manufacturers are having to ‘pass on significant cost increases to customers’. Yesterday’s

figures are another sign the rebound is holding steady following strong employment data.