Export order fears slow manufacturing growth says CBI

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Fears over a slump in export orders has slowed the pace of manufacturing growth this quarter according to the latest CBI growth indicator.

Businesses are braced for a dip in new export orders this next quarter for the first time in four years, the CBI reported.

The drop off was linked the Greek debt crisis, volatility in the Chinese stock market and Sterling's sharp rise against the Euro.

The overall rate of UK economic growth strengthened in the three months to July, the CBI research showed.

But it was professional services that was the driving force for the surge.

The survey of 736 businesses across the manufacturing, retail and service sectors showed a reading of +20% in the three months to July, compared with +14% in June.

Anna Leach, CBI head of economic analysis, said: "A healthy pace of growth puts the economy on a firm footing going into the third quarter and it looks set to stay that way through the rest of this year, as low oil prices and inflation help support spending.

"Business and professional services helped lift the economy in the previous three months as they bounced back from a temporary blip last month.

"But the strength in Sterling continues to cause headaches for exporters trying to sell inside the Eurozone."