Purchasing managers' index fell to 41 last month, its lowest reading since records began in 1992.

UK manufacturing sees sharpest decline for 17 years

The Chartered Institute of Purchasing and Supply’s purchasing managers’ index fell to 41 last month, by far the worst reading since records began.

The reading indicates contraction and further fuels fears that the UK is entering recession. Analysts are now predicting that the Bank of England may slash interest rates early next week.

The UK manufacturing sector has now been in decline for five consecutive months.

"Wherever you look in the survey, there is serious weakness, with output, new orders, and backlogs of work all contracting at the fastest rate in the survey’s history," said Howard Archer of Global Insight.

The survey also said that non-essential staff are facing the axe, while vacated positions are tending to remain unfilled.

Despite the gloomy report, UK bicycle manufacturing appears to be thriving, with Brompton alone investing £1 million in the expansion of the business this year alone.

The BBC has a detailed report on the 17-year low here.

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