A truly grim cocktail of economic figures yesterday highlighted the dangers facing the UK, with mortgage approvals tumbling to a fresh record low, manufacturing growth ending, and factory gate prices rocketing.

The figures underlined the troubles facing the UK housing market, with the potential for big falls in residential property prices looking ever greater. Mortgage approvals look set to be hit further by renewed tremors in the banking sector, with Bradford & Bingley plummeting yesterday on the stock market as it revealed the extent of its woes, and by a resumption of the upward path of interbank lending rates.

Meanwhile, the rampant factory-gate price inflation underlines the Bank of England Monetary Policy Committee's inability to cut UK base rates further to bolster the economy as manufacturing stalls, service sector growth slows, and the deteriorating housing market conditions threaten consumer spending.

The MPC starts its next two-day monthly meeting tomorrow and is expected to feel unable to do anything other than hold UK base rates at 5%, at a time when some experts are starting to talk about the need for a rise rather than a cut to tackle inflation.

Benchmark annual UK consumer prices index inflation leapt unexpectedly to 3% in April and the MPC, which has been set a 2% target by the Treasury, expects it to rise further towards 4% later this year as energy, food, and import prices exert upward pressure.

The MPC has cut base rates by a quarter-point three times this cycle, in December, February, and April.

Seasonally-adjusted figures published yesterday by the Bank of England showed that the number of fresh mortgages approved for house purchase in the UK fell from 63,000 in March to 58,000 in April.

This was way adrift of the 65,000 figure predicted by the City and the weakest since directly-comparable records began in 1999.

Global Insight chief UK economist Howard Archer pointed out that, going back through tweaks in the way the Bank of England data are calculated, the April number is the lowest since broadly-comparable monthly figures were first published in 1993.

He also noted the April figure was less than half the peak of 115,000 in May 2007.

The Bank of England said UK mortgage lending rose by a net £6.35bn in April - the weakest increase since November 2004. This rise was way adrift of the £7.5bn average in the preceding six months, and represented a sharp deceleration from a downwardly-revised increase of £6.74bn in March.

Archer said: "The Bank of England mortgage approvals data show house-buying is under severe pressure from the toxic combination of stretched affordability and tight lending conditions."

Banks have raised interest rates on new fixed-rate mortgages and hiked arrangement fees as they attempt to deal with the fall-out from the global credit crisis, which has its roots in US sub-prime mortgage default and has sent interbank lending rates surging. This has meant that homeowners have not seen much, if any, benefit from the three cuts in base rates.

Nationwide, the UK's largest building society, yesterday cited tight money market conditions as it raised the cost of fixed-rate mortgages. This followed a similar move last week by Abbey National.

Archer yesterday revised consultancy Global Insight's forecasts for UK house prices to predict greater falls than before, of 10% this year and 12% in 2009.

The housing market is viewed by some experts as more resilient in Scotland than in other parts of the UK because affordability is not as stretched as a result of a slightly less dramatic run-up in house prices north of the Border in the last decade. However, economists are tending increasingly towards forecasting a smaller fall in prices in Scotland, rather than expecting the rise projected for 2008 as a whole north of the Border by Halifax and Bank of Scotland parent HBOS.

The Chartered Institute of Purchasing and Supply revealed yesterday that the UK manufacturing sector had ground to a halt last month.

Its headline purchasing managers' index, a composite measure of activity which includes factors such as output, new orders, and employment, dropped from 50.8 in April to 50.0 in May.

This was the first time since July 2005 that this index had failed to post a figure exceeding 50.0 - the level which separates expansion from contraction.

The manufacturing output index fell from 50.7 to 50.0 - the first time this component has failed to post an expansionary reading since May 2005.

The new orders index fell from 49.4 in April to 48.3 last month - also the weakest reading since May 2005 - signalling an accelerating fall in incoming new business for manufacturers. Employment in the sector fell in May, having risen in each of the preceding two months.

In spite of the dramatic weakening of activity in the manufacturing sector, the output prices index rose from 61.9 in April to 62.0 in May to signal the fastest rate of increase in prices at the factory gate since comparable records began in 1999. This indicates that manufacturers are managing to pass on a significant part of the leap in their input costs to their customers.