Output in manufacturing in the three months to October fell by 0.7% compared to the previous three months according to the Office for National Statistics.

Industry wants to see interest rates cut again

It is the heaviest three month fall since early 1995 and wil add to the pressure for a pre-Christmas interest rate cut.

Overall industrial production fell by 0.4% with the decreases in manufacturing off-set by rises in oil and gas extraction and the utilities.

Over the period, the majority of manufacturing industries saw production fall, with metal products, printing and textiles and clothing all hard hit.

An economist at the Royal Bank of Scotland said: "The figures show us how bad things are for manufacturers and to sum up - they are awful."

Rate cut hopes

The figures confirmed the trend of recent economic indicators which point to a deepening downturn.

They come as the Bank of England's Monetary Policy Committee prepares to gather on Wednesday for its monthly two-day meeting to consider interest rates.

Hopes that the nine-member committee will vote for a third successive reduction rose sharply after last week's co-ordinated rate cut across the 11 EU states joining the first wave of the European single currency.

Manufacturers and unions, who are anxious to preserve jobs, are hoping that the Bank of England will follow suit and repeat last month's half point reduction.