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UK employment climbs briskly

LONDON (Reuters) - British manufacturing activity accelerated unexpectedly to a 16-year high in November and employment climbed at a record pace, according to a survey yesterday that pointed to a surprisingly robust recovery in the industrial sector.

The Markit/CIPS headline manufacturing Purchasing Managers’ Index (PMI) rose to 58.0 in November, its highest since September 1994, and well above October’s upwardly revised figure of 55.4. Economists had forecast a modest easing to 54.6.

The index has been above the 50.0 mark, which separates growth from contraction, for 16 months in row.

The survey is likely to come as welcome news to the government which is relying on the private sector to help sustain Britain’s economic recovery at a time of deep public spending cuts.

“Stronger manufacturing expansion may well be needed to offset a likely slowdown in consumer spending as austerity measures start to bite,” said Rob Dobson, senior economist at Markit.

With public sector cuts and a VAT rise expected to erode demand in 2011, most economists expect economic growth to weaken into 2011 after a strong performance in the middle of this year.

While the PMI figures suggest the manufacturing sector which accounts for around 13 percent of economic output is holding up well, economists have warned that upbeat activity surveys have not been reflected in official data.