The fragile recovery of the UK's manufacturing sector ground to a halt in December.

According to the Office for National Statistics, manufacturing production in December was down 0.3% compared to the previous month, while industrial production, which also includes the output of the utilities and oil and gas sector, declined by 0.5%.

The news comes one day after protests by manufacturers over the increase in interest rates announced by the Bank of England.

Manufacturing exports in particular have been hurt by the high value of the pound, which makes them more expensive than those of their European rivals.

"We already knew from the non-EU trade numbers that exports were down quite sharply in the month, so perhaps sterling is beginning to have an effect on manufacturing after all," said Michael Metcalf of NatWest Financial Markets.

Millennium effect

The ONS said there was some evidence that the figures were affected by extended shutdowns in many firms during the Christmas and Millennium holiday.

But nevertheless, they bring to an end a period of six months during which manufacturing output steadily expanded.

The ONS also said that it was revising down its estimates of output for November, with industrial production now believed to have shown no change.

The figures surprised the City, which had been expecting the strong growth in manufacturing to continue.

Surveys of businesses show that they are increasingly optimistic about the outlook for orders, but plan to continue to cut jobs and investment.