UK factory orders decline, cost pressures rise

The CBI's monthly order books balance remained at -45 in July, matching its lowest point since the COVID-19 pandemic. This indicates a persistent weakness in demand, forcing manufacturers to absorb rising costs through reduced margins, investment, and employment.

Ben Jones, CBI lead economist, stated that manufacturers are being "squeezed from both sides" by climbing costs and limited ability to raise prices due to weak demand. He urged the new administration to prioritize industrial competitiveness for re-industrializing Britain.

Quarterly data from the CBI showed that unit costs for manufacturers jumped at the fastest pace in the three months to July since the period ending October 2022. However, expectations for output in the next three months saw a slight improvement, rising to -30 from -31 in June.