LONDON British manufacturing output dropped over the three months to August by the most in almost three years, according to an industry survey on Tuesday that pointed to a further drop in new orders.

The Confederation of British Industry's (CBI) net balance of output for the three months to August fell to -19 from +3 in July, the lowest reading since September 2020.

The net balance shows the difference between the share of factories reporting rising output against those seeing a fall.

Output dropped in 15 out of 17 manufacturing sub-sectors, with the car industry and mechanical engineering among the worst performers.

The CBI's gauge of new orders also fell in August, to -15 from -9.

"With output volumes contracting at their fastest pace since the COVID-19 pandemic and order books deteriorating, this survey makes for gloomy reading," CBI economist Martin Sartorius said.

"However, easing price pressures will bring some relief to many manufacturing firms and the broader economy."

The survey's gauge of price expectations fell to its lowest since February 2021 - adding to signs of slowing inflation among manufacturers.

(Reporting by Andy Bruce; editing by David Milliken)