(Reuters) - Growth across British factories recovered over the three months to July after a weak start to the year, but manufacturers are increasingly reluctant to invest ahead of Brexit, a business survey showed on Tuesday.
The Confederation of British Industry’s (CBI) quarterly gauge of factory output rose to a one-year high of +27 in July, up from +13 in April.
Some Bank of England policymakers who are weighing up an interest rate hike next week may view the CBI survey as another sign that Britain’s economy has recovered after an unusually harsh winter.
But the CBI also reported that investment plans — particularly for productivity-boosting measures — deteriorated significantly in the three months to July.
“The pick-up in output growth is good news and with new orders still running at a healthy rate, the near-term outlook for manufacturers remains reasonably bright,” CBI chief economist Rain Newton-Smith said.
“Yet manufacturers are still in wait-and-see mode when it comes to their investment plans. Skills shortages are increasing and making it hard for businesses to invest in capital projects, particularly with ongoing uncertainty around the direction of Brexit talks.”
The CBI’s monthly gauge of factory orders cooled to +11 in July from +13 in June.
Reporting by Andy Bruce , editing by David Milliken