Manufacturing falls at record pace

By David Milliken

LONDON (Reuters) - Manufacturing shrank at a record pace in November after a collapse in new orders, purchasing managers' data from Markit/CIPS showed on Monday.

The headline manufacturing PMI figure plunged to 34.4 from October's downwardly revised 40.7 -- both the lowest level and the biggest one-month fall in the series, which started in 1992.

"The scale of the downturn in the UK manufacturing PMI data during November is unprecedented," said Rob Dobson, senior economist at Markit.

"These data suggest that the UK government and Monetary Policy Committee may need to consider additional support to the sector alongside recent sharp cuts in central bank borrowing rates," he continued.

Economists expect the Bank of England to cut rates by at least half a percentage point on Thursday, with a sizeable minority seeing a full percentage point cut to 2 percent on top of last month's 1.5 percentage point cut.

Input and output price data from the PMI survey support the Bank of England's view that inflation -- which hit a series high 5.2 percent as recently as September -- is likely to significantly undershoot its 2 percent target next year.

The input price index tumbled to 44.2 from 54.5, tipping below the 50 threshold at which point most firms report falling prices to its lowest level in over six-and-a-half years.

Output prices rose at their slowest pace since April 2006, with their index falling to 52.1 from 59.0.