By Wiktor Szary

LONDON--British manufacturers expect to sharply raise their selling prices over the next three months as the weakened pound pushes up input costs, an industry survey showed Tuesday.

The Confederation of British Industry, an employers' lobby group, said its monthly survey of sentiment in the manufacturing sector showed that selling price expectations rose to +19 in November, the highest reading in nearly three years. The balance reflects the percentage of respondents expecting prices to rise against those expecting them to fall.

Output growth slowed for a third successive month in the three months to November, but manufacturers' expectations for the quarter ahead strengthened, partly on the backof the above-average levels of export orders. The CBI questioned 430 firms between October 26 and November 11.

"The weak pound is beginning to make its mark," said Rain Newton-Smith, the CBI's chief economist. Weakened sterling, which has lost nearly a fifth of its value against the U.S. dollar since Britain voted in June to leave the European Union, lifts import prices, but bolsters U.K. exports by making British products cheaper for overseas buyers.

Some economists are concerned that as higher input prices begin to translate into accelerating consumer inflation, British shoppers may rein in their spending, hurting the U.K.'s growth prospects.

So far, there have been limited signs of that, with consumer inflation easing slightly in October from a near two-year high the previous month. Meanwhile, retail sales grew at the fastest annual pace in almost 15 years in October, as British shoppers snapped up winter hats and coats and Halloweentreats.

Write to Wiktor Szary at Wiktor.Szary@wsj.com

(END) Dow Jones Newswires

November 22, 2016 06:42 ET (11:42 GMT)

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