Manufacturing output edged up 0.1% in April but was 0.2% lower than a year earlier, according to official figures released on Tuesday. This was slightly above the market consensus, which expected no change for the month.

The Office for National Statistics said the trend was flat, with falls in non-durable goods sectors like clothing and food offset by some increase in heavy engineering.

The trend confirmed figures published earlier from the British Retail Consortium that showed sales growth weakened on the high street.

The National Institute For Economic and Social Research said that, based on the new figures, it now estimated Britain's growth rate for the three months to May to be 0.6%, up from their previous estimate of 0.3%. In the first quarter of the year the British economy grew by 0.5%, according to official figures.

Strong pound has hit firms

Manufacturers have been complaining for months that the rise in the pound has made their products uncompetitive in overseas markets.

Recently the pound fell back from its high of over three Deutschmarks, but they fear that the latest interest rate rise will keep the pound from falling back further to a more competitive level.

Industrial production, which also includes output from the energy sector, rose a stronger-than-expected 1% in April, but economists said the data did not change the picture of a manufacturing sector struggling to cope with a strong pound and higher interest rates.

Industrial production is usually more volatile, with the output of electricity, gas and water up 7.1% as April temperatures returned to normal after the milder weather of previous months.

David Philpotts of Schroders said: "The general picture obviously is still one of a very depressed output for the sector as a whole.