(RTTNews) - UK manufacturing production declined for the sixth consecutive month in August, showing the severity of the economic downturn.

The Office for National Statistics said in a report on Tuesday that manufacturing production declined 0.4% in August from the previous month, severe than a 0.2% fall in July. Economists were predicting 0.2% drop for August.

By a 0.4% fall in August, manufacturing production dropped for sixth straight month. Such six straight months of decline was last seen in 1980.

Output decreased in ten of the 13 sub-sectors and increased only in three sub-sectors in August. Within the widespread decreases, the transport equipment industries revealed a significant fall of 2.3%.

On a yearly basis, manufacturing output dropped 1.9% in August, following a 1.4% fall in the prior month. August’s fall was the largest annual decline since 2003. Economists were expecting manufacturing production to drop 1.6% in August.

Meanwhile, industrial production slid 0.6% month-on-month. Compared with August 2007, industrial production recorded a decrease of 2.3%, which the largest fall since 2005. In July, output was down 1.9%. Economists were looking for 0.2% monthly fall and an annual decline of 2% for August.

Mining and quarrying output decreased 0.7% month-on-month in August, while oil and gas production dropped 1.2% due to ongoing planned maintenance. At the same time, energy supply output fell 1.6%. Due to maintenance work being undertaken at power stations, demand for gas used in electricity generation continued to increase in August, the ONS said.

In the latest three months, manufacturing output slid 1.1% compared with the previous three months and mining and quarrying output declined 2.1%. Output of the electricity, gas and water supply industries were down 0.2% in three months to August.

Raymond Van der Putten, an economist at BNP Paribas said current market conditions are so exceptional that they warrant a 50 basis point cut. The Bank of England is set to announce its interest rate decision on October 9.

Elsewhere, a survey conducted by the British Chambers of Commerce or BCC showed that domestic economy is under immense pressure for the second straight quarter, with the survey pointing that the UK is in a worsening recession. UK needs a half-point cut in the key interest rate at the next Monetary Policy Committee meeting of Bank of England.

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