THE UK's recession-hit manufacturing sector has been dealt another blow after official figures revealed a decline in output in November.

The Office for National Statistics (ONS) said that factory output had shrunk by 0.7 per cent during November, bringing the year-on-year rate of decline down to 5.4 per cent the worst annual fall since the early 1990s.

Total industrial production, which includes mines and utilities, slipped 0.3 per cent in November and was down 4.8 per cent on 2000's figure.

The fall will come as a shock to economists, many of whom were forecasting a less severe decline.

HSBC economist John Butler said: "Manufacturing is still deep in recession led by a continued sharp decline in the production of IT-related products.

"Overall, we do not expect signs of recovery to come through for this sector until at least the second quarter."

Last week, the Bank of England decided to leave interest rates unchanged at four per cent after the massive consumer shopping spree over the Christmas period.

The move angered many associated with manufacturing, who were hoping for further cuts to ease the difficulties facing many in the hard-pressed sector.

But Mr Butler said: "One thing last year showed is that interest rates do very little to help the industrial side when the global economy is so weak.

"In our view, cutting rates further from here will only destabilise the economy more. However, the weak manufacturing side will be a constraint on early rate rises."

Separate figures published by the ONS yesterday showed factory gate prices were unchanged during December, as falls in petrol prices offset increases in food and alcohol costs. Yet prices are still 1.2 per cent lower than the previous year.

Input prices fell back 0.7 per cent in December to be 6.6 per cent below the previous year's figure because of a fall in the price of crude oil.