Manufacturing output rose for the fourth month running in June, posting its longest winning streak in nearly eight years, as the sector continued to expand despite the strong pound and rising borrowing costs.

The latest indication that the sector’s recovery is gaining momentum will bolster expectations of a further rate rise this year. The Bank of England last week left interest rates at 5.75 per cent, but another inccrease is widely expected.

The Office for National Statistics reported that manufacturing output rose by 0.2 per cent in June from May, in line with economists’ expectations. This is the first time that manufacturing output has risen for four consecutive months since September 1999.

The overall manufacturing index is now running at 103.1, the highest since August 2001.

On a three-month basis, output was up 0.6 per cent, its quickest pace since March 2006.

The gains came despite a 1.3 per cent fall in oil and gas extraction in June on the back of early maintenance work and after gas production eased back after a very strong May.

Last week, the CIPS/NTC purchasing managers’ index (PMI) showed that manufacturing activity soared last month, despite higher interest rates, rising oil prices and a strong pound.

Industrial activity rose at its fastest pace for three years, driven by a surge in orders, according to the CIPS/NTC purchasing managers’ index (PMI).

The PMI survey showed companies raising prices at the fastest pace since the series began in 1992. Input price inflation also rose and was running at its highest in almost a year.

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