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UK manufacturing growth increased last month, beating expectations, but exports fell according to the latest Markit Purchasing Managers' Index (PMI).

The index rose to a three-month-high of 52.9 in January from 52.1 in December. Any reading above 50 indicates growth.

Markit put the growth down to strong output from big manufacturers.

Rob Dobson, a senior economist at Markit, said: "The domestic market remains the key growth driver.

"Even after recent easing in the exchange rate, a number of manufacturers are still finding the strength of the pound against the euro is impacting order inflows."

Eurozone growth drops back

Markit's data showed factory activity across the Eurozone slowed at the start of 2016, dropping to 52.3 from 53.2 in December.

An upturn in orders failed to materialise despite deep price cuts.

Many economists think that the European Central Bank (ECB) will have to take further measures to boost the economies of the Eurozone.

ECB chief Mario Draghi has hinted more measures could be taken as early as March.