Industrial output falls at fastest rate for six months

Industrial output fell more than expected and at its fastest pace in six months in October, official data showed on Wednesday, raising concerns the economy may be heading for recession after a string of weak business data.

The Office for National Statistics said industrial output fell 0.7 per cent in October, more than double the decline forecast by analysts and the biggest drop since April. On the year, industrial output was 1.7 percent lower, the biggest fall since April.

Manufacturing output also fell 0.7 percent in October, again the biggest drop since April and more than three times the fall forecast by analysts.

The ONS said the decline in industrial output reflected a broad-based fall in manufacturing and a sharp drop in energy production due to the warmest October weather in five years.

Electricity and gas output dropped by 4.9 per cent in October, its biggest fall since April.

Within manufacturing, 8 of the 13 sub-sectors recorded falls in output, including basic metals and metal products and basic pharmaceutical products.

The figures confirm a recent weakening in business surveys and will raise concerns that Britain's economy is slipping back towards recession, reinforcing expectations the Bank of England may inject yet more stimulus into the economy to boost growth.

However, the central bank is not expected to increase its quantitative easing programme at its monthly meeting on Thursday, as several policymakers have indicated they would prefer to see the existing purchases completed first.

Britain's Office for Budget Responsibility -- an independent body that produces the forecasts on which the government bases its borrowing projections -- said there was a one-in-three chance of the economy falling back into contraction.

Britain's manufacturing sector has been losing steam over the past few months as the global economy slowed and British companies and consumers held back in the face of renewed market turmoil and fears of recession.

Policymakers have cited the ongoing financial turmoil in the euro zone as a major obstacle to a recovery next year, as it prevents manufacturers from filling the gap created by cuts in government spending and belt-tightening by consumers.