Sharp fall in UK manufacturing

UK manufacturing output fell by its fastest rate in six months in March, data from the Office for National Statistics has revealed.

Output fell by 0.5% after two months of surprisingly strong growth, which took the quarterly figure for the first three months of 2008 to 0.3% above the last quarter for 2007.

Figures released by the Chartered Institute of Purchasing and Supply also sounded a downbeat note, revealing that the UK services sector grew at its slowest rate in nearly five years in April as the impact of rising costs took hold.

The disappointing figures suggest the credit crunch is continuing to impact the UK economy and will add weight to the arguments of those who want to see further reductions in interest rates.