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British manufacturing output unexpectedly shrank to hit its lowest level in three years in April, a survey showed on Tuesday, suggesting the economy will slow further before next month's in-out European Union membership referendum.
With uncertainty surrounding the June 23 vote, factories are also struggling with a weaker global economy and a slowdown in the oil and gas industry, a major customer.
Sterling fell and gilt futures rose after the Markit/CIPS manufacturing Purchasing Managers' Index fell to 49.2 from 50.7 in March, the first time since March 2013 it has fallen below the 50 mark that separates expansion from contraction. It was below even the lowest forecast in a Reuters poll of economists.
