Britain’s hard-pressed manufacturing sector has recorded its biggest monthly production drop in almost a decade, sinking deeper into recession.
National Statistics said manufacturing output tumbled 1.6 per cent in September, the biggest monthly decline since May 1992. Economists had forecast a much smaller decline of just 0.7 per cent.
There were marked declines last month in once buoyant high-tech industries. Manufacturers of computer and other information equipment suffered a 6 per cent slump in output last month.
The slump in manufacturing coincided with a weak report on activity in the services sector and sterling eased against the dollar and the euro. Sterling fell to $1.4557 and 61.66 pence per euro.
The report from the Chartered Institute of Purchasing and Supply showed the key services business activity index fell to 46.3 in October, from 48.1 in the previous month.
October's figure was the worst since the survey began in July 1996 and below the crucial 50 level for a second month running - signalling economic contraction.
British manufacturing has sunk into its third recession in a decade and is shedding jobs at an alarming rate. On the year, manufacturing production was down 3.7 per cent in September, compared with 2.3 per cent in August.
Japan's Matsushita Communications, the maker of Panasonic mobile phones, said today it is to close two British plants with the loss of 400 jobs over the next few months.