UK factories to slash output and jobs – CBI

British manufacturers expect to cut output at the sharpest rate in nearly 30 years and more than 60,000 jobs could disappear before the end of the year, the Confederation of British Industry said on Tuesday.

Confidence in the manufacturing sector has also plummeted and the CBI survey's quarterly business situation balance fell 20 points to -60 in October, its lowest since July 1980 when the British economy was in the middle of a painful recession.

"The sharp manufacturing downturn and substantially reduced price pressures evident in the CBI survey heightens the case for the Bank of England to cut interest rates aggressively again in November," said Howard Archer, economist at Global Insight.

The central bank made an emergency cut in interest rates this month to shore up the economy in the face of what had become the worst banking crisis since the Great Depression.

The output expectations balance fell to -31 in October from -16, also the lowest since July 1980 while the total orders balance fell to its lowest since in five years.

"The sharp falls in orders and output show that the slowdown in the UK economy is now spreading to sectors previously resilient to the weakness in the banking and the housing markets," said Ian McCafferty, CBI chief economic adviser.

Official figures out earlier showed the number of properties changing hands slumped 53 percent on the year as the housing boom has turned to bust in the face of a global credit crunch.

That has already hit estate agents and furniture retailers hard and on Tuesday two of Britain's biggest clothing retailers, Arcadia and Debenhams Plc reported sharply lower profits as despondent consumers cut back on non-essentials.

Figures out on Friday are expected to show the British economy shrank in the third quarter for the first time since the early 1990s.