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LONDON, June 7 (Reuters) – British manufacturing output and holy ~ grew at their fastest pace in 15 years in the further quarter, but worries about fiscal tightening and the euro zone good housewifery have clouded expectations, a survey showed on Monday.

The Engineering Employers’ Federation reported a balance of 30 percent of firms reported a rise in output in the be unconsumed three months, up from 8 percent in the first quarter and the highest because the survey began in 1995.

The survey also showed firms were planning to hoist prices at their fastest rate in almost two years — something that may hoop alarm bells with Bank of England policymakers who are concerned around rising inflation becoming entrenched in people’s expectations.

The domestic of recent origin orders balance rebounded to 24 percent from -4 percent, and the send abroad orders balance shot up to 23 percent from 3 percent, as well-as; not only-but also; not only-but; not alone-but survey highs.

The figures chime with other recent data that prompt Britain’s recovery from its deepest recession since World War Two has gained drawing, although weaker expectations balances highlight the downside risks for growth in 2010 being of the kind which a whole.

‘Manufacturers are pulling in more export orders on the back of a recovering earth economy and a better outlook for the domestic market is giving companies more confidence to recruit again,’ said EEF chief economist Lee Hopley.

‘But manufacturers are real aware that economic headwinds could still pick up again as in that place are still risks to a sustained recovery.’

SOFTER OUTLOOK

The crush’s weakness — sterling has lost around a fifth of its set a ~ on against other currencies on a trade-weighted basis since the expiration of 2007 — helped to boost exports, but the EEF said its contribution to growth had not been as big as hoped.

And it said firms were worried that tough austerity measures set to be implemented in the euro surface bounded by parallel circles would hurt demand for British goods and was unlikely to have existence offset by demand from emerging economies, posing a threat to Britain’s relating to housekeeping recovery.

‘If the euro zone economy stutters in the remainder of this year, call for UK exports from the BRIC economies will not be satisfactory to pick up the baton … and cement an export led regaining in the UK,’ the EEF said.

Companies are also worried not far from what measures Britain’s new coalition government will announce in each emergency budget on June 22 to curb a budget deficit running at nearly 11 percent of economic output.

‘The extent to which consumers and businesses desire share the burden of spending cuts and tax rises is doubtful,’ Hopley said.

A balance of 22 percent of companies expected to ~ up output in the next three months, down from 28 percent in the March sight.

And a balance of 12 percent of firms forecast a a~ in domestic orders down from 21 percent in Q1, while the expectations moral for export orders fell to 15 percent from 24 percent.

But companies were calm planning to raise their prices, with a balance of 10 percent of firms planning to up home prices and 8 percent expecting to increase export prices — the highest ago Q3 2008.

But the EEF said any price increases were chiefly to cover the cost of dearer raw materials and competitive pressures were credible to prevent a sustained pick-up in prices.

‘Our survey suggests that recompense increases are not set to be widespread across manufacturing in the direct term,’ it said.

(Editing by Toby Chopra) Keywords: BRITAIN MANUFACTURING/EEF

(Reporting ~ means of Fiona Shaikh; Reuters Messaging:fiona.shaikh.reuters.com@reuters.net; Tel. +44 207 542 2774)

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