British manufacturing output unexpectedly fell at its sharpest pace in seven months in October, raising fresh concern about the sector's recovery from recession.
The Office for National Statistics said manufacturing output fell 0.7% in October, the third monthly decline in a row. This compared with analysts' expectations of a rise of 0.2% on the month and left output 0.9% lower than a year earlier.
The figures are likely to boost expectations that the Bank of England may have to cut interest rates again next year because it has been too optimistic on economic growth prospects. The central bank has been counting on a pick-up in exports following signs of economic recovery in the euro zone, a key market for British goods.
But the latest data are likely to suggest that all is still not well for Britain's manufacturers who suffered a recession in the first half of 2005.
The wider industrial sector - which includes Britain's North Sea oil fields - also posted its sharpest contraction since March. Output fell by 1% on the month and by 1.8% on the year. Within that, oil and gas output declined by 2.1% in October and the ONS attributed that to lower domestic demand for heating because of an unusually warm October.
