THE manufacturing sector received more bad news as official figures showed industrial output slumped during July.

Data from the Office for National Statistics showed production fell by 1.3 per cent in three months to July and by 2.5 per cent compared with the same period a year ago.

Most of the drop was down to manufacturing, which fell over the three-month period by 2.1 per cent, hit hard by a significant drop in output by the tech and telecom sector.

Simon Rubinsohn, chief economist at stockbrokers Gerrard, said the data was "much worse than expected, demonstrating in the clearest possible terms that the recession in the manufacturing sector is continuing to deepen".

He said the figures painted a gloomy picture for the rest of the UK economy.

Also hit were paper, printing and publishing and basic metals and metal products.

Also down was electricity, gas and water supply output, which slipped 0.9 per cent over the three months.