New £150m strategy to boost manufacturing

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The Independent Online

The Government today unveiled a new strategy for manufacturing, bringing together £150m of support for companies.

Ministers said they wanted to help manufacturers get through the current "demanding times" but added there were good reasons to be confident about the future.

The Government said Britain had the open and flexible markets that would allow business to react to the current challenges.

Business Secretary John Hutton said: "Manufacturing is central to the success of the UK economy and it is vital the sector has the right foundations to endure the current economic slowdown and emerge stronger and fitter than ever.

"I want the UK to be at the forefront of opportunities opened up by the move towards a low carbon economy."

Mr Hutton said the UK could become world leaders in "green" technologies supporting hundreds of thousands of so-called green collar jobs.

"For many years the industry's success has suffered from a lack of public recognition and it is time we redressed this balance. We must attract more talented young people into the industry and ensure that this talent is nurtured and developed."

The Government announced a new drive to help the nuclear and renewables industries expand in future years which could create up to 260,000 new jobs over the next decade.

Plans were also unveiled for an extra 1,500 manufacturing apprenticeships and other support for skills and training.

There will be a new manufacturing technology centre built in Coventry which ministers hope could lead to £130m-worth of investment in research over the next decade.

A new manufacturing body will also be set up aimed at tempting youngsters into a career in industry.

There were also signals that the growing economic slowdown is beginning to hit firms' ability to raise prices. This has been sought by the Bank of England's rate-setters to help keep a lid on inflation.

Excluding volatile factors such as petrol and food product costs, "core" output prices fell 0.1 per cent over the month for the first time since October 2005, the ONS said.

Investec economist David Page said the figures would be a "massive boost" to the Bank's Monetary Policy Committee, which has left rates unchanged at 5 per cent since April due to inflation running at more than double its official 2 per cent target.

"Today's substantial decline may mark a significant easing in medium-term inflation pressures as cost pressures - inspired by some of the excesses of global demand - finally appear to be abating," he said.

Howard Archer, chief European and UK economist at Global Insight, said the figures added weight to expectations that interest rates could be cut by 0.25 per cent to 4.75 per cent in November.

The lower factory gate prices came despite a 0.9 per cent rise in food product prices over the month to August, with fresh bread costs up 2.8 per cent.

Over the year to August, food product prices were up 12.5 per cent - the highest rate of annual increase since records began in 1986.

But cheaper scrap metals also helped the price of manufactured products fall 2.1 per cent over the month, the biggest decline since November 1997.