Factory orders fall in January

Factory orders unexpectedly fell in January, but firms are still expecting to raise prices markedly in the coming months, the CBI's industrial trends survey showed.

The Confederation of British Industry survey's total order book balance fell to -16 this month from a 30-month high of -3 in December. Analysts had expected a reading of -2.

However, January's reading was still above the long-run trend for this balance, the CBI said.

The prices expectations balance rose to its highest since August 2008.

"The recovery in the manufacturing sector is firmly in place and looks set to continue" said CBI chief economic advisor Ian McCafferty.

"Manufacturers have come under intense pressure to pass on rising costs: they have increased prices markedly in this quarter and expect to raise them at an even faster pace over the next three months. This will drive further inflationary pressure in the wider economy."

Quarterly data published at the same time showed firms expected their business situation to improve, with a business situation balance of +7 from +2 in October.