THE CBI in Kent and Medway has called for a half-point interest rate cut after the troubled manufacturing sector suffered further decline in orders and output.

The CBI's Quarterly Industrial Trends survey shows confidence falling for the first time since January, prompting firms to cut investment and jobs.

Nigel Bourne, the CBI's South East regional director based in Sevenoaks, said: "Manufacturers had hopes that life was going to get easier, but instead it has become tougher. Economic conditions in the US and Germany are particularly uncertain, and were they to worsen, the UK economy would need further help to prevent a sharp slowdown next year.

"The Monetary Policy Committee faces a difficult decision. Underlying inflation and the current strength of the housing market need careful handling. It would not be helpful for a decision to cut interest rates to be made and then swiftly reversed. However, if economic conditions continue to weaken over the next few months, the CBI would look for a decisive cut of half a percentage point."

Manufacturing continues to lose jobs at an alarming rate. Around 163,000 were lost nationwide in the three months to August. The CBI said numbers had fallen for the 20th survey in a row.