Britain's manufacturing orders dropped in December after a short-lived improvement in November, the country's main employer group said today.
The latest monthly trends survey from the Confederation of British Industry (CBI) found 45 per cent of manufacturing firms reported that their total orders were below normal, while 13 per cent said they were above normal.
The balance of -32 per cent was worse than -22 per cent in November, and compared with -33 percent in October.
"There will be no Christmas cheer for manufacturers this year as fears mount that the sector will slip back into recession," said Mr Doug Godden, CBI head of economic analysis. "Orders have fallen to the low levels seen last autumn and winter, which has knocked output expectations and maintained the squeeze on prices and profits".
Financial markets were swift to respond, with gilt futures and interest rate-sensitive short sterling contracts extending gains as dealers bet that prospects for another rate cut have risen, at least marginally.
Export orders continued to suffered the global economic downturn. The balance of -33 per cent this month compared with -34 in October and November.