Weak factory figures alarm City analysts

The pace of recovery in UK factories slowed last month stoking fears that it will be a long journey out of recession.

The Purchasing Managers' Index for manufacturers — a key barometer of activity in the sector where anything above 50 represents growth — fell from 53.4 in October to 51.8 in November.

It was the fourth month of growth in the last five but was weaker than expected and alarmed City analysts.

Lena Komileva at Tullett Prebon said: "The figures show a loss of momentum just as hopes were rising about a recovery."

David Noble, chief executive of the Chartered Institute of Purchasing and Supply which carried out the survey, said: "After surviving one of the deepest downturns in recent memory, the manufacturing sector has slowly but surely started to grow again and conditions are looking decidedly less sickly than at the start of the year.

"However, the extent to which output fell during the recession means that the growth is coming from a particularly low base and there is a long way to go before we can say the sector has returned to full health.

"There are signs the rebound in growth may be nearing its peak, leaving question marks over the longer term outlook and the possibility of a double-dip recession."