MIXED messages emerged last night about the state of the economy and what impact it may have on interest rates.

Fears that last month's soaring temperatures had curbed growth on the high street were partially allayed, while manufacturing firms suffered a blow to morale after a recent upturn.

On the housing front, figures showed that homebuyers borrowed record amounts last month.

The conflicting data will give the Bank of England's rate-setting body, the Monetary Policy Committee, much to consider when they meet in a few weeks time.

The MPC was widely expected to be gearing up for a rate increase on the back of concerns over escalating personal borrowing and suggestions that manufacturing had turned the corner.

But the Confederation of British Industry painted a gloomy picture, revealing its latest monthly industrial trends survey showed order books were on the slide.

About 45 per cent of manufacturers reported that orders were below normal, with only 12 per cent saying they were above, when questioned between August 21 and September 10.

The balance of 33 per cent between positive and negative responses contrast with a gap of only 24 points last month.

Levels of home loan borrowing are still cause for concern after the Council of Mortgage Lenders said a total of £11.5bn was advanced to people buying a new home during the month, up from the previous record of £11bn set in July.