Factory orders fell at their fastest pace in a year in October and firms expected to cut output as worries about the euro zone debt crisis weighed on sentiment, the CBI's October industrial trends survey showed on Wednesday.
The Confederation of British Industry survey's total order book balance fell to -18 this month from -9 in September, the lowest since October 2010 and confounding expectations for a steady reading of -9.
The fall in orders reflected a decline in export orders, which dropped to -14, also its lowest in a year, and companies expected to reduce output with the output expectations balance falling to -11 from +9, its lowest in more than two years (since Britain was in a recession).
Additional quarterly data showed firms' sentiment plunged in October, with the business situation balance falling to -30 from -16, its lowest since April 2009.
Sentiment has deteriorated sharply, and firms expect sizeable falls in activity over the next three months. The quarterly fall in sentiment is the highest since the height of the recessions in mid-2009, said CBI chief economic advisor Ian McCafferty.
Confidence among manufacturers is no doubt also being sapped by uncertainty over developments in the euro zone, leading to broader concerns over global growth.