British businesses reported the fastest growth in new orders since June this month, paired with record cost pressures, paving the way for a Bank of England rate hike in December. The IHS Markit/CIPS flash composite purchasing managers' index (PMI) fell to 57.7 in November from 57.8 in October. However, this still suggested significant growth.

"A combination of sustained solid corporate growth, more job market gains, and record inflationary pressures gives interest rates the green light to climb in December," said Chris Williamson, chief business economist at financial data company IHS Markit.

The BoE caught many investors off guard at the start of this month by leaving interest rates at a record low of 0.1%, despite signalling that a raise was on the way, saying it needed more time to assess the end of the government's furlough jobs support programme on October 1.

Inflation likely to hit 5%, warns Bank of England chief economist - BBC News

Since then, data shows that consumer price inflation hit a 10-year high of 4.2% in October, while firms continued to hire strongly and job openings reached a new high. Although the flash, or preliminary, PMI showed a dip in net hiring to its lowest level since April, IHS Markit said that this was due to recruitment challenges rather than a levelling-off of demand.

Input costs in the composite index rose at the quickest rate since 1998, owing to rising wages, increasing energy bills, and other cost pressures.

Reduced COVID-19 restrictions aided the increase in orders. While the majority of the coronavirus restrictions in England had been lifted by July, the subsequent relaxation of travel restrictions has boosted services exports.

The BoE expects inflation to reach around 5% next year, and its chief economist, Huw Pill, said on Friday that patience would be required as it returned to its objective of 2%.