Manufacturing output fell by a larger than expected 0.4% in September, giving a dismal 0.1% rise on the year, the Office for National Statistics (ONS) said on Thursday.

Industrial production, which includes output by the gas, water and electricity industries, plummeted by a massive 0.6%, far worse than the 0.2% dip expected by analysts.

Analysts had predicted that manufactured output would fall by 0.2% in September from August levels and rise 0.4% on a 12-month comparison.

The strength of the pound has severely dented production

Industrial output had been predicted to fall only 0.3% in September from August and to rise a full 1% on a 12-month comparison.

'Flat picture'

The ONS, which calculates official economic data, said the manufacturing sector showed a "flat picture", following a 0.5% rise on the previous month.

The strong pound and the drying up of global markets in Asia and Russia have knocked UK industry sideways.

The statistics are more in line now with recent business surveys which have shown output to be falling back on monthly levels.

"Weakness in the sector has been apparent for some while, so today's data will hardly surprise," said Jeremy Hawkins, economist at the Bank of America.

"Nonetheless, with signs that the downturn in the goods producing sector is now feeding more obviously into services, the latest nosedive will only add to recession worries."

Analysts said the latest figures pointed to a possible downward revision to third quarter GDP data.