LONDON (Reuters) – British manufacturing output and new orders fell by the most in more than two years in August in the face of deepening uncertainty about surging inflation and the risk of recession at home and abroad, a survey showed on Thursday.

The S&P Global/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) dropped to 47.3 from 52.1 in July although the final reading was less weak than a “flash” estimate of 46.0.

The headline figure and the survey’s measure of new business were both at their lowest since May 2020, when Britain was in the grip of its first coronavirus lockdown.

Jobs growth virtually stalled and business confidence fell.

S&P Global said orders from key markets such as the United States, the European Union and China were down, compounding problems from port congestion and supply chains that date from the coronavirus pandemic, and complications related to Brexit.

But there were some potentially comforting signs for the Bank of England, which has raised interest rates six times since December to try to stop the surge in inflation from becoming a long-term problem for Britain’s economy.

The rise in input costs for factories – such as containers, electronics, energy, packaging, raw materials and transportation – remained above average but it was the weakest increase since November 2020.

Selling price inflation also eased off, according to the survey, which was conducted between Aug. 12 and Aug. 25.

(Reporting by William Schomberg; Editing by Hugh Lawson)