The Bank of England was today urged to cut interest rates in a bid

to protect engineering firms from renewed weakness in the global economy.

The Engineering Employers' Federation (EEF) called on the bank to show it was aware of the problems facing hundreds of its members.

Its latest survey shows engineering output and orders have fallen for six successive quarters with the downturn widespread across all industries.

The EEF believes more than 100,000 jobs will be cut in the sector this year as a recovery takes longer to materialise.

Chief economist Step-hen Radley said global uncertainty, driven by a slump in world trade, had hit investment plans at home.

He said: "Renewed weakness in the world economy and in business confidence has stopped the recovery in UK manufacturing in its tracks.

"With overall growth slowing and inflation under control, the Bank of England has room to reduce interest rates.

"A quarter-point cut on Thursday would help to prevent the recovery weakening further."

The EEF's survey, from a poll of 1,200 firms, comes after a report yesterday showed manufacturing activity expanded slightly last month.

The Chartered Institute of Purchasing and Supply said the rebound was due to strong growth in factory output as order books began to fill up.

Engineering firms make up for about 40 per cent of the UK's manufacturing industry. They employ 27,000 people in Sussex generating £978 million a year.

The EEF said engineering output had fallen 16 per cent since the end of 2000 compared with an eight per cent fall in the wider manufacturing sector.

All UK regions were suffering with larger falls in production in the current quarter than in the three months to the end of June.

Interest rates have been held at four per cent, their lowest level since the early Sixties, for almost a year.