British manufacturing output surged in November, expanding at its fastest rate in nearly five years.

The news is a further sign that the UK economy is recovering rapidly from its slowdown last winter and is poised for strong growth in 2000.

It also makes it more likely that the Bank of England will continue to raise interest rates.

Manufacturing output grew by 0.6% in November, far higher than expected by analysts. In October, manufacturing output has expanded by just 0.1%.

"These figures are much punchier than expected and, together with the upward revision to October, will put the Bank on amber alert with regard to a possible tightening of monetary policy again in February," said Philip Shaw, chief economist at Investec bank in London.

The growth was led by food, drink, tobacco, and electrical goods, all suggesting a pre-Christmas spending spree by retailers.

Manufacturing, which has been the weakest section of the UK economy, is now growing at a trend rate of 3.5%, according to the Office of National Statistics - fastest than the larger services sector.

But some analysts warned that the figures may be misleading.

Neil Parker of the Royal Bank of Scotland warned that the rise in output may have been due to manufacturers building up stocks ahead of Christmas and could fall back again in the New Year.

"Manufacturers were preparing for what they thought was going to be a really good period for sales. We would be cautious about this data for fear of a `Millennium hangover' effect," he said.

Overcoming the high pound

The news is even more surprising given the high pound, which makes UK exports more expensive.

As the euro has weakened, sterling is now trading at above three Deutschmarks, a rate most economists believe is uncompetitive.

But demand has been boosted by the strong domestic and world economy.

The growth of output will help ease the gap in economic conditions between Southern England and the North, which is more dependent on manufacturing.

More rate rises on the way

It was the fear of further damaging the manufacturing sector that has so far, restrained the Bank of England from raising interest rates further.

Now that manufacturing is growing so strongly, the Bank is more likely to raise interest rates further, following the 0.25% increase last week that has taken the base rate to 5.75%.

Other signs also point to strong economic growth, including the rise in wages and the rapid increase in house prices, all of which the Bank fears could unleash inflation.