Weak industrial output figures released yesterday seem certain to see Britain leave interest rates unchanged when the Bank of England's monetary policy committee meets this week.
Manufacturing output, which accounts for about 80 per cent of industrial output, fell 0.4 per cent in August, its worst performance since April and double the 0.2 per cent fall forecast.
Overall industrial output, which includes utility and North Sea production, fell 1.1 per cent, its worst performance in three years, due to sharp falls in oil and gas output and a drop in energy production due to unseasonably warm weather, National Statistics said.
The figures provide fresh confirmation the economy is slowing after a growth spurt in recent years. This will allow the central bank to hold its interest rate fire when it meets this week.
The figures come just days before Britain's Chancellor of the Exchequer Mr Gordon Brown delivers his eagerly awaited pre-Budget report on Wednesday, which is expected to put more cash back into taxpayers' pockets.
"The figures point to an underlying slowdown . . . it looks as if the goods-producing sector will be a major drag on gross domestic product this quarter," said Mr Jeremy Hawkins, economist at Bank of America.
Statisticians said the main reasons for the fall in industrial production were a poor showing from mining and quarrying due to weak oil and gas output because of maintenance stoppages, and in energy output due to warm weather.
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