British manufacturers are expecting output to climb strongly during the rest of the year, according to the latest Confederation of British Industry survey.

The CBI's monthly industrial trends survey showed 30 per cent of firms expect orders to rise in the next four months, while only 13 per cent expect them to fall.

The positive balance of 17 per cent compares to a figure of minus four per cent in the Confederation's last quarterly survey in July.

At the same time the CBI predicted a steady recovery for the UK economy as a whole.

It predicted GDP growth - the basic measure of economic performance - of 1.2 per cent in 1999 and 2.3 per cent in 2000.

Kate Barker, the CBI's chief economic adviser, said the signs of recovery should not be taken as evidence that interest rates should rise. "The economy has just shifted out of first gear and now is not the time to start applying the brakes."

The strength of the pound in the foreign exchange markets has put a squeeze on exporters over the last year as their goods proved expensive for overseas buyers.

The industrial trends survey, while showing manufacturers in a positive mood, showed actual recovery was still sluggish and exports still down on normal levels.

Penny Hemming, CBI regional director, Yorkshire and the Humber, said: "Manufacturers can take some heart from these findings, but export order books are still below normal and there is continuing pressure on prices."

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