British manufacturing output fell unexpectedly sharply in February, casting doubt over the sector's much-vaunted recovery and reducing the likelihood of an interest rate rise this week.
The Office for National Statistics said that manufacturing output fell by 0.6% in February, to stand only 0.2% higher than a year earlier. Analysts had predicted an output rise of 0.4%. January's previously reported rise in output was also revised away to a flat reading.
The wider measure of industrial output, which includes the utilities sector, also fell by 0.6% against expectations of a rise of 0.4%. On the year, total industrial output was down 1.2% on the year, the sharpest decline since May 2003.
The figures may cause the Bank of England to delay raising interest rates to cool soaring house prices and debt levels, especially when sterling remains strong.
Many analysts have predicted the central bank will raise borrowing costs for the third time since November this Thursday but admitted it was a very close call between this week and next month's meeting.
The ONS said the decline in manufacturing was driven by a sharp fall in the output of the pulp, paper and publishing industries. This accounted for a third of the overall decline and was a result of weakness in the publishing sector beyond the usual seasonal decline.
