THE UK manufacturing sector is on the brink of recession after official figures showed output fell for the fifth straight month in July.

The Office for National Statistics (ONS) said manufacturing output dropped 0.2 per cent during the month, marginally worse than the 0.1 per cent drop expected by analysts.

Paul Dales of Capital Economics said the sector needed to show growth of 0.7 per cebt in both August and September for UK manufacturing to avoid a technical recession, as defined by consecutive quarters of falling output.

He added: "The manufacturing sector is leading the rest of the economy into recession."

The monthly fall in manufacturing output was driven by a contraction in production of optical and electrical equipment, the ONS said, down 1.3 per cent.

That tallies with evidence from the high street of falling sales for electrical goods for retailers such as PC World and Currys.

During the three months to July, the ONS also reported a 2.4 per cent drop in food, drink and tobacco manufacturing output. Soaring raw material costs have seen food inflation reach record levels, piling pressure on households.