Britain's manufacturing sector shrank for the fourth month in a row in August, according to new figures.

The Chartered Institute of Purchasing and Supply (CIPS)/Markit Purchasing Managers’ Index was 45.9, up from 44.1 in July.

The level of new export orders also continued to decline, posting a reading of 46.4, up from 46.3 last month.

The Employment Index came in at 43.8, slightly up on July, as almost one-in-five companies witnessed job cuts and declines in the consumer, intermediate and investments goods sectors.

Roy Ayliffe, director of professional practice at CIPS, said: “Although the manufacturing economy improved marginally from July’s nine-and-a-half year low , the sector is still declining but at a slower rate. Purchasing managers reported that the weak domestic market and inflationary rises added further pressures. In particular, costs continued to surge on the back of high energy, food and fuel prices, while Sterling’s weakness also pushed up the cost of imports.”