UK manufacturing shows signs of a slowdown

Rising raw material costs dent factory resurgence with output down to seven-month low

Britain's manufacturers showed signs of a slowdown at the start of the year amid rising costs for raw materials, sending factory output to a seven-month low.

The Markit/Cips UK manufacturing PMI index showed activity fell to 55.3 last month from 56.2 in December, missing City forecasts of a further acceleration in growth. However, the PMI remained well above its long-run average of 51.7 and above the 50 mark which separates expansion from contraction.

Inflation is when prices rise. Deflation is the opposite - price decreases over time - but inflation is far more common.