An influential barometer of industrial confidence this week recorded its sharpest dive for 18 years.
The Confederation of British Industry’s latest Industrial Trends Survey, published on Tuesday, showed overall manufacturing confidence plummeting to its lowest level since July 1980, reflecting a marked deterioration in domestic orders. Other sectors of the economy are also suffering.
Eighty per cent of replies to the CBIsurvey were received before the 0.25% cut in interest rates on 7 October.
But the findings will add to the mounting clamour from industry for a more substantial interest rate cut when the Bank of England’s Monetary Policy Committee meets in November.
Adair Turner, director general of the CBI, said that with weaker growth already evident in other sectors of the economy, the CBI survey suggested an increased risk of outright recession.
‘We are therefore calling for a cut of 0.5% in interest rates at the MPC meeting next month to ensure this downturn is not necessarily prolonged.’
The Engineering Employers’ Federation warned last week that over 100,000 engineering jobs will go in 1999.