Official report raises fears of UK manufacturing recession

More gloom was hanging over British manufacturers today after a weak survey prompted warnings of a recession in the sector.

A balance of just 3% of manufacturers said they expect output growth next year - the lowest level for nearly two years, according to the CBI's December industrial trends survey.

Capital Economics expert Paul Dales said the survey was a "forewarning of recession" in the sector after the CBI also reported an easing of demand.

Although manufacturers enjoyed their first positive growth in exports since February thanks to sterling's fall in value against the euro, the overall balance of companies reporting higher than normal orders fell to 2% - well below City expectations.

Global Insight chief economist Howard Archer added: "(The survey) suggests that the recently resilient manufacturing activity is now starting to flag in the face of serious headwinds."