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Manufacturing orders strong, but prices up sharply after post-Brexit sterling drop

The CBI report showed its total order book balance improved to +8 from +5 in January, well above its long-run average of -15 and better than forecasts for a fall to +3.

Car making at Jaguar
But a measure of how manufacturers expect to change their prices over the next three months rose further to hit its highest level since April 2011, the CBI said

UK manufacturers this month saw their order books grow at the strongest pace in two years, but the post-Brexit vote fall in the value of the pound is pushing up prices sharply, a survey showed today.

The Confederation of British industry's report showed its total order book balance improved to +8 from +5 in January, well above its long-run average of -15 and better than  forecasts for a fall to +3.

But a measure of how manufacturers expect to change their prices over the next three months rose further to hit its highest level since April 2011, the CBI said.

Homes smaller …

Meanwhile, rising inflation, worries about Brexit and tighter lending rules have seen asking prices for homes in England and Wales increase more slowly, according to the latest report by online estate agents Rightmove.

During the month to February 11 - when there is typically a seasonal price spike of about 5% - asking prices were just 2% higher than the month before, the smallest rise for the time of year since 2009.

Compared with a year earlier, Rightmove said asking prices were 2.3% higher, the weakest increase since April 2013.

Hammond boost …

Chancellor Philip Hammond is likely to hit his 2016/17 deficit reduction target with £3bn to spare, due to recent better-than-expected growth, economists at EY ITEM Club forecast today.

Hammond will present his first annual budget on March 8 and aims to reduce the UK’s budget deficit to £68.2bn, after government forecasters said in November that June's Brexit vote had made his predecessor George Osborne's £55.5bn goal unrealistic.

The E&Y economists’ said the new deficit forecast from the Office for Budget Responsibility of £65bn for 2016/17 now looked plausible, even if the longer-run budget outlook remained sombre.

Personal injuries …

Motor insurer Direct Line (LON:DLG) has said it expects new rules to determine lump-sum payouts for personal injury claims to have less impact than previously estimated because it had already started to factor in a change.

A government review into the so-called Ogden Rate is due to be released soon, and most analysts expect the level to fall from its current maximum 2.5%, in place since 2001, given a slide in real interest rates since then.

Any downwards move in the rate would require insurers to pay out more in cash to claimants to ensure that returns over their lifetime met the awarded compensation, a potential hit to motor insurers' profitability.

Direct Line said it was already applying a rate of 1.5% when calculating its personal injury claims liabilities, which could mitigate the impact of any downward revision of the Ogden Rate.

Paltry savings …

Low income families in Britain hold an average of just £95 in savings and investments, compared to a mean £62,885 that higher income families have, according to new research, which highlights the widening gap between rich and poor.

According to insurer Aviva’s Family Finances report, the savings gap between low and high income families has increased 25 per cent year-on-year, from £50,072 to £62,790, with UK households facing increased financial pressure from stalling incomes and savings, combined with rising debt and inflation fears.

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