The unexpected slump has reinforced concerns over the strength and stability of any recovery, after recent reports suggested that the economy could be on the verge of a return to growth.

The latest Index of Production, published by the ONS, revealed that factory output dropped 1.9% between July and August and 11.3% year-on-year to 87.8, as all 13 manufacturing categories registered a fall.

Pulp, paper, printing and publishing led the decline, with a 2.8% drop in output over the latest three-month period, which included a 4.6% fall in 'Printing and related activities; recorded media'.

The ONS figures contrast with the latest Printing Outlook survey from the BPIF, which suggested that the decline in conditions is slowing across the sector.

News of the sudden drop off in manufacturing output follows a recent International Monetary Fund warning that a second credit squeeze and a £200bn national "funding gap" could sabotage the recovery in the British economy.

Meanwhile, the Bank of England's Monetary Policy Committee is expected to hold interest rates at 0.5% when it concludes its latest meeting tomorrow.