Britain is facing a "manufacturing meltdown" with business failures and job losses now a certainty, the British Chambers of Commerce (BCC) has warned, sending sterling to a five-week low against the mark. The pound rose over 0.3p against sterling to 85.76p sterling.

The BCC's latest quarterly economic survey, which covered over 9,000 British firms, showed manufacturing export sales at record lows and home sales and orders in a six-year trough in the second quarter. Manufacturing confidence in future turnover and profitability hit its lowest level since 1992.

But Trade and Industry Secretary, Ms Margaret Beckett, said talk of a meltdown in manufacturing was "nonsense". "There is real concern, and that is understandable, but there is also a rather more mixed picture," she told parliament.