Reacting to today's publication by the Office for National Statistics (ONS) of Industrial and Manufacturing Output figures for July 2006, David Kern, Economic Adviser to the British Chambers of Commerce (BCC), said:

"Today's manufacturing figures for July 2006 confirm that a gradual manufacturing upturn is underway. But there is a clear risk that further interest rate increases would damage the sector, which is highly dependent on exports. The pound is very strong and higher interest rates would erode export competitiveness at a time when there are growing fears over US and global growth prospects next year."

"Manufacturing output rose by 0.2pc between June and July 2006, broadly as expected. In the three months May-July 2006, manufacturing increased by 0.9pc compared with the previous three months and by 1.2pc compared with the same period a year ago.

Mr Kern concluded: "The manufacturing figures are still weak by historical standards and the fragile recovery that is now under way needs to be nurtured. Calls for higher interest rates are unjustified and should be forcefully rejected."