GROWTH in new manufacturing orders ground to "near stagnation" levels in September as the sector suffered its worst performance for 17 months.

Companies reported weaker increases in production, new business and new export orders, as the CIPS/Markit purchasing managers' index survey gave a worse-than-expected reading of 51.6.

That was down from 52.5 in August, which itself was a 14-month low.

The figure is still above the 50 threshold indicating growth, however, the overall survey paints a picture of a broad slowdown with price pressure also subdued.

Rob Dobson, Markit senior economist, said export orders had slowed because of the continued weakness in eurozone countries and the strength of the pound against the euro last month.

He said only demand from the US, Germany, Scandinavia and the Middle-East helped offset the slowdown in new export orders.

Her added: "The strong upsurge in the UK manufacturing sector at the start of the year appears to have run its course, with the September PMI at a 17-month low and growth of new orders easing to near stagnation."

"With manufacturers reporting weaker selling price increases and a fall in input costs, the picture of waning inflationary pressures painted by industry may provide some leeway for the Bank of England to hold off from raising rates even if strong growth persists."