Staycations are on the increase and tourists are spending more when they visit the UK, the Bank of England has said.

The bank said the latest data from its 12 regional agents also showed business activity had edged up and consumer spending was remaining resilient.

The agents, who speak to hundreds of UK companies each month, said that growth in the services and manufacturing sectors improved in the final three months of the year.

They said there was evidence that people were increasingly choosing to stay in the UK for holidays and hat tourists were making the most of the fall in the value of the pound to spend big when they visit.

However, British companies’ costs for materials and imports rose at the fastest pace in about five years in the the past three months, which would boost inflation noticeably next year, the bank said. The rate of inflation rose to 1.2% in the year to November and is expected to reach 2.7% by the end of 2017 due to the fall in the value of the pound, which has dropped 17% since the UK voted to leave the EU in June.

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