By David Milliken
LONDON (Reuters) - British manufacturing output grew at the fastest pace in six months in January as global supply chain pressures began to ease and factories largely shrugged off a wave of cases caused by the Omicron variant of coronavirus, a survey showed on Tuesday.
The IHS Markit/CIPS Purchasing Managers' Index (PMI) showed the output index rose to 54.5 in January - its highest since July 2021 - from 53.6 in December, stronger than an initial flash estimate of 53.8.
Factories hired workers at the second-fastest rate in 11 years, and they reported some easing of inflation pressures.
"Although supply chain constraints continued to stymie growth, there were signs that these were past their peak, a factor contributing to a slight easing in purchase price inflation," IHS Markit said.
Softening price pressures will be welcomed by the Bank of England, which is widely expected to raise interest rates on Thursday for the second time in less than two months due to concern that high inflation could prove persistent.
The headline PMI edged down to a four-month low of 57.3 in January from 57.9 in December, which reflected the weakest growth of new orders since February 2021 as well as faster deliveries from suppliers - a factor that depresses the index as in normal times it is a sign of spare capacity.
Britain's economy only regained its pre-crisis size in November, and many economists reckon it shrank by around 0.5% over December and January when a surge of COVID-19 cases hit hospitality and office staff were advised to work from home where possible.
On Sunday, the Confederation of British Industry said its members estimated private-sector growth in the three months to January was the weakest since the three months to April, when many businesses were still operating under lockdown.
However, Tuesday's PMI data pointed to some relief in the supply-chain disruption that has contributed to consumer price inflation rising to its highest in nearly 30 years.
The PMI showed manufacturers' input prices rose at the slowest pace since April 2021 while output prices rose at the slowest pace since May - although in outright terms both price increases are far above their long-run average.