LONDON (Reuters) - British manufacturing activity unexpectedly picked up a little speed in November as domestic demand offset falling exports due to sluggish orders from the euro zone and emerging markets, a survey showed on Monday.
Markit/CIPS's UK Manufacturing Purchasing Managers' Index (PMI) rose to 53.5 from 53.3 in October, reaching its highest level in four months and keeping well above the 50.0 mark denoting expansion.
Economists taking part in a Reuters poll had expected the index to weaken slightly to 53.0.
Growth in new orders helped push up employment in the sector to a four-month high.
The survey adds to signs that a slowdown in Britain's economic recovery at the end of 2014 is unlikely to be sharp.
That will be welcome news for finance minister George Osborne who is set to deliver a half-yearly update on the economy on Wednesday.
Osborne has warned that Britain is not immune to weakness in the global economy, and Monday's survey showed manufacturing exports continued to fall - although by less than in October - as orders from the European Union, emerging economies and Russia slowed.
Orders from the euro zone were also hit by the weakening of the euro against sterling, survey compilers Markit said.
Inflation pressures in the manufacturing sector remained subdued as input costs fell for a third consecutive month, while output prices increased at their slowest pace since June of last year, reflecting the exchange rate and low commodity prices.
"Waning inflationary pressures in industry will continue to provide some leeway for the Bank of England to hold off from raising (interest) rates even as solid growth persists," , Rob Dobson, senior economist at Markit, said.
Falling oil prices could further reduce costs, he said.
Manufacturing accounts for about 10 percent of Britain's economy. A survey for the country's dominant services sector is due to be published on Wednesday.
A separate survey published on Monday by employers group CBI showed Britain's economy continued to grow in the three months to November as manufacturing helped offset a slowdown in the retail sector. While growth remained slower than earlier in the year, it was still well above the long-run average.
Reporting By Liisa Tuhkanen, editing by William Schomberg and; Hugh Lawson