Growth eases fear of a double dip

Britain's manufacturers dusted themselves down in January after a grim pre-Christmas run with the strongest growth for eight months, according to yesterday's barometer of the sector's fortunes.

Manufacturing output shrank 0.9 per cent in the last quarter of 2011 as the economy overall shrank by 0.2 per cent.

But the latest Chartered Institute of Purchasing & Supply/Markit survey showed signs of life last month as its activity index hit 52.1, the best since last March.

A score over 50 on the index signals expansion.

If sustained, the improvement should help the UK avoid another quarter of economic contraction and a technical double-dip recession.

The more upbeat tone of the Cips survey, which features rising new orders and easing price pressure on firms, may also persuade Bank of England rate-setters to vote for a smaller dose of money printing than expected at their policy meeting next week.

David Noble, Cips chief executive, said: "The UK manufacturing sector has sprung to life in the first month of 2012 to defy any economic gloom, but it is too early to say whether this trend is sustainable."