UK manufacturing confidence dropped to its lowest since the last recession after Britain voted to leave the EU, according to the Confederation of British Industry.

Uncertainty ahead of the referendum on the UK's membership of the EU is having an impact on investment in the UK.

The UK economy would face a “serious shock” even if were to strike new trade deals rapidly after leaving the EU, the Confederation of British Industry — the CBI — has said in a major report published today.

Irish manufacturing continued to grow last month, but the pace of expansion was the slowest for two years — raising fears about the the outlook for expansion.

Economic growth in the UK picked up pace in the three months to August but the British economy faces risks from the knock-on effect of turbulence in China, the CBI said.

Britain’s private sector recorded its strongest economic growth for a year in the three months to May, according to the Confederation of British Industry, in contrast to weak official data for the first quarter of 2015.

British retail sales growth surged in May as expectations for sales next month hit their highest level in more than 26 years, an industry survey showed.