Britain's hard-pressed manufacturing sector is firmly mired in recession, suffering a further fall in activity levels in August, according to a key survey published today.
The Chartered Institute of Purchasing and Supply's report, sponsored by Reuters, showed the seasonally adjusted purchasing managers' index (PMI) for the manufacturing sector slid to 46.4 in August from July's 47.0.
Economists had forecast PMI reading of 46.8. Any reading below 50 signals economic contraction.
The index - a composite of several variables from output to employment - has now fallen for six months in a row to stand at its lowest level since the start of 1999.
Gloomy news from Britain's factory sector comes just days ahead of the latest meeting of the Bank of England's Monetary Policy Committee, which is expected to leave lending rates unchanged at 5 per cent this week.
Britain's manufacturing sector, which accounts for about one-fifth of the British economy, has long been in the doldrums. But there have been recent signs the dominant services sector has also begun to succumb to the slowdown in global demand.
The slowdown means Britain's economic growth rate is likely to be around 2 per cent this year - lower than the Treasury forecast of 2.25 to 2.75 per cent.