UK manufacturing growth hits 21-month low

The manufacturing sector expanded at its slowest pace in almost two years last month, as factories reduced hiring and new orders fell, a survey showed.

The Markit/CIPS manufacturing PMI index sank to a 21-month low of 51.3 in June from May's downwardly revised 52.0, worse than the average forecast from economists that the index would hold steady at 52.1, the previously reported level for May.

"The manufacturing sector continued to slip closer to stagnation in June," said Rob Dobson, senior economist at Markit. "The data will call into question the sector's ability to pl ay a major role in delivering a robust and sustainable economic recovery."

Manufacturing makes up about 14 percent of the British economy, and grew by a modest 0.7 percent in the first three months of the year.

Britain's government and the Bank of England are relying on strong, export-driven manufacturing growth to support the broader economy, as domestic demand and particularly consumer spending are under pressure from fiscal consolidation.

Official data showed a hefty 1.5 per cent fall in production in April due to an extra public holiday for the royal wedding, and the output component of June's PMI survey showed that growth had not bounced back to its pre-wedding levels.