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UK manufacturing figures flat in August

UK manufacturing levels rose by 0.1% in August on the previous month
UK manufacturing levels rose by 0.1% in August on the previous month

The recovery for UK manufacturers is showing more signs of running out of steam after it was revealed factory output barely grew in August. 

The Office for National Statistics said manufacturing rose by 0.1% on the previous month, although the figure was still 3.9% higher than a year ago. 

The latest data will fuel fears that producers are being squeezed by weak growth in key export markets such as the euro zone and a stronger pound. 

It was revealed earlier that German industrial production fell by 4% in August, its steepest drop since the height of the financial crisis in 2009. 

Economists warned there was a slowing trend in the UK's goods-producing sector, even though the ONS put some of August's weakness down to longer than usual summer shutdowns for maintenance in the car sector. 

"The disappointing reading is not a one-off. Manufacturing output in the three months to August was also flat on the prior three month period. Back in April, this three-month growth rate had hit 1.9%," commented Markit chief economist Chris Williamson. 

The ONS said the wider measure of industrial production, which includes the energy sector, was unchanged on the previous month. 

The slowdown in the pace of growth in manufacturing is likely to be another factor in persuading Bank of England policymakers that they should continue to hold off from raising interest rates for another month. 

They are due to meet later this week but with the weakness of the eurozone economy a major concern they are expected to make no change to the Bank's base rate, which has stood at 0.5% for over five years.