Faster decline in factory output

The output of the UK's manufacturers, miners and energy producers has declined at its fastest rate for more than a year, official figures suggest.

Output between March and May fell by 0.5% compared with the previous three months, according to the Office for National Statistics (ONS).

Machinery and equipment-making industries suffered a fall of 1.5%.

The worse-than-expected decline has heightened concern that the UK economic downturn is deepening.

'Adds to gloom'

There had been hope that the weakening of the pound against the euro - which makes UK exports cheaper for those in the eurozone - would give respite to the manufacturing sector.

But the figures added to the view that the UK economy was "perilously close to recession" said Paul Dales from Capital Economics.

"The lower pound should mean that the manufacturing sector is the UK's shining light, but with output no higher than eight months ago, it seems that the global and domestic slowdowns are having more of an impact," he said.

The data "added to the gloom" of recent economic updates said Michael Hume, an analyst at Lehman Brothers.

"It is the manufacturing sector that the Bank of England is depending on to keep the recession wolves from the door as it is the depreciation of sterling that it sees as providing the stimulus of recovery," Mr Hume said.

"If this is not happening – perhaps because producers are raising prices or because export markets are turning down – then the Bank's forecast for recovery looks misplaced."

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