MANUFACTURERS are more optimistic about their export markets than they have been for a year, according to new figures.

But the survey by the Confederation of British Industry (CBI) warned the Bank of England not to take this as a signal to keep interest rates on hold next month. The CBI's latest quarterly industrial-trends survey said 27 per cent of firms were more optimistic about their export prospects for the coming 12 months than in the previous quarter, while 20 per cent were less optimistic.

This balance is the first positive figure reported for a year.

Output increased slightly over the last quarter, in line with expectations, while business confidence fell at a much slower rate than in the four months to October.

But investment intentions and employment prospects remained "depressingly weak", the CBI said. Inadequate net returns and uncertainty about demand are the main factors limiting investment.

Nick Reilly, chairman of the CBI's economic affairs committee, said the economic picture did not change the confederation's stance that interest rates needed to be cut by a quarter point. He said: "The recent weakening of sterling against the euro and continued growth in Europe should help UK exports."