MANUFACTURERS fear another 26,000 jobs will be lost in the next few months as the sector continues to struggle, a survey has found.

Costs increased sharply during the past quarter and confidence has fallen in most parts of the UK, research showed.

A survey of 736 companies by the Confederation of British Industry (CBI) and business strategy group Experian led to predictions that the biggest job cuts would be in the North-East, London and the South-East, the North-West, East Midlands, and East of England.

Manufacturers have been affected by the increased cost of oil, metal and other raw materials, while orders fell across the country, especially in the North-East, North-West and West Midlands.

The CBI's head of economic analysis Doug Godden said: "Manufacturing confidence has been hit in most parts of the UK. Costs have risen sharply and job cuts are on the horizon.

"There is a mixed picture across the UK economy as a whole and the Bank of England should hold interest rates steady for the time being.

''This survey highlights the renewed difficulties facing important parts of the economy and there is certainly no justification for a rate rise at this time."

Peter Gutmann, of Experian, said: "The fall in business confidence and export optimism highlights uncertainties among manufacturing firms following weak trends in export orders in recent months.

"While many economic forecasts assume a robust pick-up in exports this year, firms at the sharp end seem no longer to believe that a buoyant international backdrop will necessarily produce this."