Fresh concern emerged over the fate of the manufacturing sector today when official figures showed lower than expected growth in factory output.

Although output increased by 0.1% between August and September, this was lower than the 0.4% expected by analysts, who said it made ''pretty grim reading'' for the industrial sector.

Data from the Office for National Statistics (ONS) also showed that industrial production - which includes gas and oil - fell by 1.4% in the last quarter.

Economist Philip Shaw, at Investec Securities, warned this could lead to a downward revision of GDP figures.

He said: ''Although the manufacturing sector appears to have expanded a little bit it is another disappointing out-turn. The manufacturing figures continue to perform on the disappointing side of expectations.''

The 0.1% hike represented relief from a 0.7% drop last month, which was the third decline in as many months.

But it was not as upbeat as survey data - a study by the Chartered Institute of Purchasing and Supply said earlier this week that the rate of growth increased for the first time since July.

Mr Shaw added: ''There is a clear disconnection between the ONS and the survey data, but even so it makes some pretty grim reading.''

A major driver behind this month's increase was within the electrical and optical equipment industries, where production rose by 1.5% over the month.