by business editor Trevor Sturgess

The cost of raw materials faced by businesses across the south east has risen at the fastest rate in two years, according to a survey.

The Lloyds TSB South East Business Activity Index, published today, reveals that in November the region recorded the third-fastest rate of input cost inflation among 12 UK regions.

Raw material costs rose at their fastest since September 2008, with manufacturers bearing the brunt of inflationary pressures. The cost of metals, plastics, textiles, foodstuffs and fuel all rose steeply. Higher prices were passed on to customers as charges continued to rise.

The index - formerly sponsored by the South East England Development Agency - measures the combined output of the region's manufacturing and service sectors and is based on the Chartered Institute of Purchasing and Supply Purchasing Managers' Indexes (or PMIs).

The Index also identified a rise in economic output which increased at the fastest rate since June. Jobs growth was maintained but at a weak rate. Employment in the private sector has increased seven times in the past eight months.

Phil Beales, area director for Lloyds TSB Commercial in Kent and East Sussex, said: "The South East private sector continued to gain growth momentum in November that had been lost over the summer. The region posted a steeper gain in new business than all areas of the UK during the month. This helped fuel further job creation, although the latest improvement in demand did bring with it greater inflationary pressures."