UK manufacturing output fell for a sixth consecutive month in August - clocking up its longest losing streak since 1980 - according to official data yesterday which heaped further pressure on the Bank of England to cut interest rates.

The UK's deepening economic troubles are also underlined by news today of the sharpest fall in overall demand for staff in the 11-year history of a survey published by the Recruitment and Employment Confederation and accountancy firm KPMG.

The latest batch of grim economic news raises pressure on the Bank of England's Monetary Policy Committee to cut UK base rates from 5% when it concludes its two-day meeting at noon tomorrow, especially given the dire straits in which the global financial sector finds itself. Base rates have been at 5% since April, when the MPC implemented the third quarter-point cut in this cycle.

The Office for National Statistics said UK manufacturing output fell 0.4% during August, double the month-on-month drop forecast by the City, to leave it 1.9% lower than in the same month last year. Manufacturing output in August was 2.3% lower than in February, before the decline started.

Wider industrial production, which includes mining and quarrying, oil and gas extraction, and electricity, gas and water supply, as well as manufacturing, fell by 0.6% during August. The City had predicted a month-on-month drop of just 0.2%. Industrial production in August was 2.3% lower than in the same month last year.

Oil and gas extraction dropped by 1.2% between July and August.

Paul Dales, UK economist at consultancy Capital Economics, said: "August's industrial production data continued the run of very weak news on the UK economy, and provided further evidence that the UK probably entered a recession in the third quarter."

The fall in manufacturing output was broadly-based, with output falling in five of the seven sub-sectors between July and August.

Dales believes the industrial production data leave "industry on course to contract by at least 1.1% in Q3 compared to the 0.7% drop in Q2".

He said: "With the industrial sector making up 18% of the overall economy, and if other things remained the same, this would be enough to reduce GDP (gross domestic product) growth from the quarterly rate of 0.0% seen in Q2 to minus-0.1% in Q3. Accordingly, these data add to other evidence suggesting that the UK has entered a recession."

Dales added: "Overall, it is clear that the global and domestic downturns are taking their toll on industry and are more than offsetting any benefits from the lower pound."

Capital is forecasting the UK economy will contract by 1% in 2009 and by a further 0.5% in 2010, after growing by 1.2% this year.

Howard Archer, chief UK economist at consultancy Global Insight, said: "The news on the manufacturing sector is relentlessly bad at the moment, indicating that the sector's downturn is deepening."

Noting that the latest survey evidence from the Chartered Institute of Purchasing and Supply, the Confederation of British Industry, and British Chambers of Commerce was "extremely weak with orders particularly depressed", Archer added: "This bodes ill for future production."

Manufacturing output fell by 0.9% between the first and second quarters.

Archer said: "It is clear that manufacturing output contracted sharply again in the third quarter...thereby putting the sector firmly in recession."