OUTPUT in the UK's struggling manufacturing sector dropped unexpectedly by 0.6 per cent in August, the first monthly fall since March.

City economists had been predicting the data from the Office for National Statistics (ONS) would register an increase of about 0.2 per cent, compared with July's revised 0.3 per cent rise.

The fall, which was the largest since October last year, means the Bank of England will probably leave interest rates unchanged at their current 48-year low of 3.5 per cent.

Figures showed falls in car and machinery production, dampening manufacturing activity.

Industrial production, a wider measure which also includes utilities and mining, fell 0.9 per cent, compared with July's revised 0.1 per cent fall.