Factory orders growth picked up more than expected in March to its highest pace in three years and firms expected to ramp up prices at the fastest rate in over two-and-a-half years, a survey showed.
The Confederation of British Industry survey's total order book balance jumped to +5 this month from -8 in February, well above expectations of a reading of -6.
The gauge for domestic price expectations rose to +33 in March from +32 in the previous month, hitting its highest level since July 2008, the survey showed.
"The manufacturing recovery is picking up pace, with firms predicting robust output growth over the next quarter," said CBI chief economic advisor Ian McCafferty. "Inflationary pressures in the manufacturing sector remain very acute, as firms look to pass on sharply increased raw material costs," he said.