The CBI reports that UK-based manufacturers are bullish about price increases.

The May Industrial Trends Survey highlights that 32 per cent of manufacturers expect prices to rise in the next quarter. This is the highest balance of respondents that have held this view since March 1995.

Ian McCafferty, the CBI's chief economic adviser, comments:

"In spite of the slight weakening in export orders the manufacturing sector continues to go from strength to strength with healthy order books, solid output growth and continued ability to put up prices, reversing the squeeze in profit margins of last year."

"However, we have not yet seen the impact of the four recent rises in interest rates on domestic demand so, while this data will be closely monitored by the bank, there is little justification for another rate rise immediately."