A big monthly rise in output from the volatile oil and gas sector lifted the broader industrial output measure, but overall growth was broadly in line with economists' expectations.
The Office for National Statistics said that factory output fell by 0.3 per cent on the month -- versus a forecast 0. 2 per cent fall - to take the annual rate of growth to 1.5 per cent, the lowest reading since February 2010.
Industrial output rose 0.2 per cent on the month, compared to forecasts for a 0.2 per cent dip. On the year, output was still one per cent lower.
Oil and gas output jumped by 2.3 per cent on the month, its biggest rise since March 2010. The sector has been depressed in recent months due to disruption earlier in the year than usual from maintenance, and the Office for National Statistics said August's rise represented an increase from a low base.
The figures confirm a recent weakening in business surveys and will raise concerns that the economy is slipping back towards recession, validating the Bank of England's m move to inject more stimulus into the economy to boost growth.
The British Chambers of Commerce (BCC) warned earlier that the economy barely grew in the third quarter and risks were growing, calling on the government to do more.
The 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.
The government and Bank of England had been relying on strong export-driven growth in manufacturing in 2011 to fill the gap created by cuts in government spending and belt-tightening by consumers.