Manufacturing decline sparks fears of double-dip recession

The first three-month decline in manufacturing output in two years has been revealed, fuelling fears of a double-dip recession.

Manufacturing fell 0.7 per cent in the three months to October, compared with the previous months, while output also fell 0.7 per cent month-on-month, the Office for National Statistics (ONS) said.

"October's official UK industrial production figures are even weaker than we or the consensus had expected and suggest that the risk that the overall economy re-enters recession in the fourth quarter remains high," said Samuel Tombs, UK economist at Capital Economics.

The decline was driven by falls in the metals, repair and pharmaceutical industries and dragged the overall index of production, which includes the mining and energy sectors, down by a worse-than-expected 0.7 per cent.

Economists said the figures added to mounting evidence that the economy will contract in the fourth quarter of the year, between October and December, following similarly bleak purchasing managers' index (PMI) data.

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