The outlook is brighter for the UK's long-suffering manufacturers

Business leaders said that Britain's beleaguered manufacturing sector showed some improvement in November.

The CBI's total order books balance rose to minus 24 in November, up from a three-and-a-half year low of minus 40 in October.

But despite rising export orders, it warned that conditions for manufacturers were "still tough".

Growth forecasts up

The CBI also revised its growth forecast for 2003 to 2.0%, up from 1.8% previously.

We can now be more confident that the UK is on the road to economic recovery Ian McCafferty, CBI chief economist

The growth prediction for 2004 has been revised upwards from 2.4% to 2.8%, with 2.7% growth forecast for the following year.

However, the CBI warned that growth would still fall short of Treasury forecasts, with Chancellor Gordon Brown predicting a growth rate of 3.0% to 3.5% next year.

UK base rates, meanwhile, are expected to rise by one percentage point over the next year, with the Bank of England predicted to take them as high as 5% by May 2005.

"We can now be more confident that the UK is on the road to economic recovery," said Ian McCafferty, CBI chief economist.