British industrial output fell more than twice as fast as expected in January, shrinking at its fastest annual pace since January 1981, official data showed.
The figures from the Office for National Statistics show Britain's sharp economic downturn did not slow in pace at the start of 2009, and match similarly bleak data from France also released on Tuesday.
The Office for National Statistics said industrial production, which makes up 18% of economic output, fell 2.6% in January, much worse than the 1.2% drop forecast by analysts.
That took the annual rate of decline to 11.4%.
Industrial output in the three months to January fell by 5.6% compared with the previous three months, the biggest fall since March 1974.
Britain entered recession last year for the first time since the early 1990s, and GDP shrank at its fastest pace since 1980 in the last three months of 2008.
British exporters showed little sign of benefiting from the pound's weakening trend and sterling lost almost half a cent against the US dollar after the data further dented investors' confidence in the state of the economy.
“It's bad,” said George Buckley, chief UK economist at Deutsche Bank. “This is very much part of a global downturn.”
Manufacturing output, which accounts for around 14% of the economy, fell by 2.9% on the month against forecasts for a 1.4% fall. This brought an annual drop of 12.8%, also the steepest decline since January 1981.
In the three months to January compared with the previous three months, factory output fell by 6.4%, its biggest drop since records began in 1968.
“This horrific outcome points to another chunky subtraction from overall GDP during Q1,” said Alan Clarke at BNP Paribas.
But analysts said the much weaker than expected figures would have little impact on monetary policy as the Bank of England has already cut interest rates down to a record low of 0.5% and is starting an aggressive program of quantitative easing.
The ONS said 12 out of 13 manufacturing sectors recorded declines in the three months to January, with especially significant falls in transport equipment, basic metals and metal products, machinery and equipment, and chemicals and man-made fibers.
The only sector which increased output was coke, refined petrol and nuclear fuel, which expanded by 4.2%. (Reuters)