The growth, a rise of 1.8 per cent, beat forecasts for a 1 per cent rise and was the strongest showing since March 2010. However, the wider measure of industrial production only rose by 0.9 per cent in May, which was smaller than expected. This was mainly due to a sharp drop in oil and gas production due to unplanned maintenance work.
Britain’s manufacturing sector has been seen as the cornerstone for growth in the economy, but it is difficult to measure the true situation, as some firms have been affected by supply problems stemming from the disruption caused by March's earthquake and tsunami in Japan.
The statistics office said the effects of the Japanese tsunami on UK manufacturing diminished in May. A number of car manufacturers indicated that sales were getting back towards normal levels.
Ross Walker, analyst at RBS, said, "The manufacturing production figures rebounded much more strongly than the market thought. That tells us more about the underlying state of demand and activity.”
"The broader industrial production numbers matter more arithmetically for GDP, but the BoE will pay more attention to the factory numbers," he added.
However, May's increase failed to offset April’s 1.7 per cent drop, leaving some analysts concerned about the bigger picture.
"Even a decent rebound in June would probably leave industrial production down quite sharply in Q2 as a whole compared to Q1 and therefore dragging on GDP growth," said Vicky Redwood at Capital Economics.
"The survey evidence has given a pretty consistent picture of an underlying slowdown in demand for UK manufacturers' products both at home and overseas. Accordingly, this slowdown in the industrial recovery looks like it might continue."
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In the wake of the Derby factory of train maker Bombardier missing out on the £1.4bn Thameslink contract, unions and opposition politicians have called for the government to review its decision to choose German company Siemens to build 1,200 carriages for the Bedford to Brighton route.
However, the Government has said that the Siemens bid represented the best value for money, and that it was following EU procurement rules, which do not allow where companies are based to be taken into account, when choosing the supplier.
Transport Secretary Philip Hammond and Business Secretary Vince Cable have written to the prime minister suggesting that the UK needed to look at the way in which EU procurement rules were operated.
"The way some of our continental partners approach these things is to look more strategically at the domestic supply chain," Mr Hammond said.
But Chantal Hughes, European commission spokeswoman for the single market commented: "It's too easy to say that the job losses in Derby are the EU's fault and that it's because of EU rules that Bombardier lost out.”
And Stephen Kinsella, head of European competition law at the Sidley Austin law firm said: "The UK decided quite a while ago that it would have a competition policy and no other considerations."
The European commission pointed out that when it comes to bidding for public contracts elsewhere in the EU, the British are unusually successful, winning 17 per cent, second only to the Germans.
"It's too easy to say that the French choose only French suppliers, the Germans choose German suppliers and only the UK is naive enough to choose non-UK suppliers, thus putting themselves at a disadvantage," Ms Hughes said.
But Mark Young, co-ordinating officer of the Unite union said: "I don't know of any procurement that's been in France or Germany that has gone to any other company other than the indigenous rail manufacturers in their countries."
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In a scheme devised by the Forum of Private Business (FPB), MPs across the UK are set to learn about the realities of running a small business through special work experience placements between now and September.
Almost 100 MPs have signed up to the scheme so far, including Cabinet Office minister Oliver Letwin, who will spend time at a pie shop in his West Dorset constituency in September.
The first of the visits, which the FPB said would see MPs “mucking in” and experiencing “first-hand the problems facing smaller businesses”, took place yesterday, with the rest to take place through Parliament’s summer recess.
Of the almost 100 MPs who have signed up so far, Bury North's David Nuttall, has agreed a stint at electronic engineering firm EAS Technology, Withington MP John Leech will spend some time at a financial advisers in Didsbury and Tourism Minister John Penrose is set to be matched with a company in the tourism industry in his Weston-super-Mare constituency.
The FPB’s Head of Campaigns, Jane Bennet said: “It's all well and good for lobby groups like the Forum to tell the Government about the issues facing small businesses, but there's no substitute for first-hand experience. We want politicians to see for themselves what it's like to run a small business - that's why we developed the Business Buddy scheme.”
Business Minister Mark Prisk has given the scheme his backing and urged his fellow MPs to get involved.
Mr Prisk said: “It is absolutely vital that the people charged with creating the best possible environment for business start-up and growth understand what it is like to juggle the daily demands of running a business.”
The Business Buddy Scheme forms part of the Forum's new campaign, Get Britain Trading. Get Britain Trading focuses on making things simpler for businesses in order to give them and the economy a boost.
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The UK’s five largest banks are to participate in mentoring schemes aimed at helping smaller businesses grow and develop in areas such as finance, HR and marketing.
Barclays, HSBC, Lloyds Banking Group, Royal Bank of Scotland and Santander are recruiting current and retired employees to act as volunteers for the scheme and the Government’s ambition is to have as many as 35,000 advisers in place, drawn from both the financial sector and trade bodies.
Under the Project Merlin deal with the Government the banks had agreed to lend £76bn to SMEs in 2011, equating to £19bn a quarter. However, they have been criticised for failing, as they had only lent £16.8bn in the first quarter of this year.
Stephen Pegg, director at Lloyds Banking Group said that there was finance available and this scheme would help businesses gain access to it.
"Having a bit of financial input, someone to ask the right questions... helps you put together better lending propositions so actually that finance can get out there and businesses can be encouraged to have the confidence to invest and the contacts to look at a wider range of finance," he said.
And Andrew Cave from the Federation of Small Businesses, said: "(This initiative) starts to repair the mistakes of the past by bringing people who are working in the banks closer to the business community."
It is hoped that the network of managers will be the catalyst for a much larger mentoring system capable of taking over from the Business Link centres, which are due to shut down in the autumn.
Business Minister Mark Prisk said: "The mentoring is really replacing the 1,500 currently state paid advisers we have under Business Link by recognising that most SMEs ... are looking for someone who has been there and done it; someone who has solved that problem and they are looking for that practical advice.”
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With the Dilnot report on funding for long-term care of the elderly out today, most politicians have realised that the majority of the cost of caring for an ageing population will have to be met by the Government.
Andrew Dilnot’s review of social care has been called a "once-in-a-lifetime" chance to fix the way Britain finances care for its growing numbers of old people.
At the moment care for the elderly is means-tested and anyone with more than a relatively modest £23,250 in assets has to pay their own way. As a result, older people fear that their life savings could be swallowed up by care costs, leaving them nothing to pass on to their children.
The report now suggests a "shared payment" system, where both the state and individuals may have to pay more towards care costs. It is likely that individuals will be responsible for all care costs for a number of years, but once costs exceed a set limit or cap, then the state will step.
A cap of between £35,000 and £50,000 has been suggested, which would almost certainly mean that the Government would have to raise taxes or cut other public spending to pay for it.
New Treasury figures show that while the initial cost will be £2.5 billion a year this will double within a decade to around £5 billion - equivalent to £200 per household.
Another solution to the new hefty price tag would be for taxpayers to buy insurance, although at present, insurers are reluctant to cover what could be a limitless cost.
Prime Minister David Cameron will today welcome the report and Government ministers will call it a "serious and thoughtful" attempt at tackling a major issue.
However, despite calls from an alliance of charities urging political leaders not to “let reform fall off the table for another generation," it is unlikely that any new system will be in place before the next election.
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