More UK factories turn away from foreign suppliers, survey shows

Novelty bags are seen for sale on a stall on Oxford Street in London

LONDON (Reuters) - British manufacturers are increasingly turning away from overseas suppliers as energy and transport costs mount and European Union firms are also worried about doing business across the English Channel after Brexit, a survey showed.

Make UK, an industry group, said on Tuesday that 40% of British manufacturers "re-shored" suppliers in the last year and a similar proportion planned to do so in the next 12 months with rising costs the main factor.

The survey also showed that almost half of respondent companies said EU suppliers were now more cautious about the UK, citing trade tensions and red tape after Brexit and broader tussling between economic super-powers including the EU.

Stephen Phipson, Make UK's chief executive, said it was time to address the damage done to Britain's reputation by the chaos in British politics since the 2016 vote to leave the EU.

"The political mismanagement of our economy and damage to the reputation of the UK as a partner on such a grand scale, together with the disregard of the rule of law in our political system, cannot continue," Phipson said in excerpts of a speech he was due to make at Make UK's annual conference.

Last week, Britain and the EU agreed on changes to post-Brexit trading rules for Northern Ireland, a contrast to the approach taken by former prime minister Boris Johnson who had threatened to take unilateral action.

"Hopefully the agreement reached last week will be the beginning of a new chapter," Phipson said.

Phipson urged the government to develop an industrial strategy to support Britain's automotive industry by enabling more electric battery capacity, end delays on its plans for small nuclear power generators and boost skills training.

(Writing by William Schomberg, editing by Andy Bruce)