Is British manufacturing growth faltering?

A key index produced by purchasing managers slipped by more than expected, hitting a five-month low.

Exports fell for the first time in seven months, according to the Chartered Institute of Purchasing and Supply (CIPS).

The figures seem to contradict last week's optimistic manufacturing numbers from the CBI business group.

Mixed reactions

Economists are divided over the implications of the survey for interest rate policy from the Bank of England.

Falling demand might stay the Bank's hand in upping interest rates, but inflation fears remain significant for the Bank's Monetary Policy Committee.

Royal Bank of Scotland chief economist Andrew McLaughlin said that one month's statistics are not enough to throw the Bank's own forecasts for economic performance off course.

But more figures pointing in the same direction could spell trouble, he said.

If official data for the third quarter of the year shows falling exports "then a few splinters just came off the Bank's boat", Mr McLauglin said.

The CIPS index of purchasing managers activity stood at 53.1 for September, below a forecast figure of 53.7, though still well above a level of 50, which is the dividing line between economic expansion and contraction.