Plea to aid manufacturers

The government should introduce policies designed to minimise the burden of the economic downturn on manufacturing jobs, the EEF has urged.

The body's study - done in conjunction with accountancy firm Grant Thornton - found that many organisations had shelved investment and hiring plans and instead intend to lay off staff.

The group acknowledged that interest rate cuts were not likely in the short-term due to the high rate of inflation but urged the government to avoid policies that would put further costs onto businesses and to "put in place policies which will provide the building blocks for an upturn".

"There are now clear signs that these pressures are starting to take their toll on companies," said EEF chief economist Steve Radley.

"Given the Bank of England's hands remain tied in the short term, it is now essential the government tackles this turning point for the economy head on."