A squeeze on household finances dampened spending on consumer goods last month, pushing UK manufacturing to a weaker end despite an otherwise positive year.

IHS Markit’s manufacturing purchasing managers’ index (PMI) for the month of December came in at 56.3, at the bottom end of expectations but still well above 50, which denotes growth.

The consumer goods sector lost momentum, suggesting that shoppers remain reluctant to splash out on big-ticket items.

The PMI also showed manufacturers added staff at the slowest pace in six months, showing that job creation, which has been strong, is now slowing.

However, cost pressures faced by British factories cooled to a four-month low - good news for Bank of England policymakers who think consumer price inflation is already around its peak.

While growth in new business, output, export orders and employment slowed in December, the PMI stayed above its 55.9 average for 2017 as a whole.

Rob Dobson, director at IHS Markit, said: “Expansion remained comfortably above long-term trend rates. The sector has therefore broadly maintained its solid boost to broader economic expansion in the fourth quarter. The outlook is also reasonably bright.”