The Chartered Institute of Purchasing and Supply (CIPS)/Markit manufacturing purchasing managers’ index (PMI) has today revealed UK manufacturing activity contracted last month.

The closely-watched CIPS/Markit manufacturing PMI sank to 47.4 in October from September’s reading of 50.8.

Today’s survey means the index has fallen below the crucial 50 mark – which separates growth from expansion.

Furthermore, the index is now at its lowest level since June 2009 – when the economy was still in recession – and suggests a weak start to the final quarter of 2011.

Chris Williamson, chief economist at Markit, said there is a “significant risk” of the economy contracting in the fourth quarter and this follows similar observations made last week by Martin Weale and Paul Fisher, who are both members of the Bank of England’s Monetary Policy Committee.

The manufacturing sector accounts for around 13% of economic output.

Construction activity and service sector activity figures will be published later this week.

In other news today, the Office for National Statistics (ONS) revealed the UK economy expanded by a better-than-expected 0.5% in the July to September period.

This compares with a 0.1% growth rate for the second quarter and was better than the 0.3% expected by most economists.

The better performance was attributed to production sector output, which rose 0.5% in the three month period, versus a 1.2% decline in the previous quarter.

Meanwhile, business services and finance were the biggest contributor to overall growth in the period, expanding by 0.8%, the Office for National Statistics said.

However, the better than expected figures should not be regarded as an economic rebound since it compares with a second quarter which was hit by “special factors” such as the Royal Wedding and Japanese tsunami which trimmed as much as 0.5 percentage points from quarterly growth, analysts’ said.

Analysts also point out that the third quarter growth was still weak, at just 0.5%, and the outlook remains bleak.

The Bank of England has today revealed mortgage approvals fell in September for the first time in six months.

According to the Bank, there were 50,967 loans approved in the month – down 3% on August’s figure.

However, September’s figure was broadly in line with forecasts and suggests the UK mortgage market will remain subdued for some time to come.

Approvals still remain well below levels seen prior to the financial crisis.

Since the early 1990s, mortgage approvals have averaged around 90,000 a month but the credit crunch saw a tightening of lending criteria and many have been unable to secure a mortgage unless they have a significant deposit.

In other news today, HM Revenue & Customs (HMRC) revealed a fall in the number of homes sold in September in the UK.

According to HMRC, 72,000 homes worth at least £40,000 or more were sold in the month – the second consecutive monthly decline and way below the July peak of 83,000.

At the height of the housing boom in July 2007, 151,000 homes were sold.

Commenting on the figures, Howard Archer of IHS Global Insight, said: “September’s retreat in mortgage approvals reinforces belief that there is little evidence of any significant step in housing market activity.”

Mr Archer also believes that house prices are likely to fall in the coming months as a result of rising unemployment and increasing uncertainty surrounding the economy.

According to a report by the Office for National Statistics (ONS), the number of people paying into an occupational pension has slumped to a level not seen since 1956.

Last year, there were 8.3 million people contributing to an occupational pension (3 million in the private sector and 5.3 million in the public sector).

This represented the lowest figure for 54 years when 8 million contributed to this type of scheme – down from a record high of just over 12 million in 1967.

According to the National Association of Pension Funds (NAPF), in the last decade, thousands of private sector final salary schemes have closed to new members, with less than one in five final salary schemes now open to both new and existing members.

Commenting on the report, Joanne Segars, NAPF Chief Executive, said: “It’s astonishing that pension uptake has slumped to such a low level, and with a greying population living longer and longer, it’s the last thing our society needs.

“Unemployment is partly to blame, but many who have a job are struggling with household finances and the rising cost of living. People are thinking about today and putting tomorrow on hold, and unfortunately saving into a pension is being seen as a luxury,” she added.

She explains that many are being put off by the turmoil in the stock markets, as well as falling confidence in the pensions industry’s fees and charges.

However, Ms Segars warns that those who opt to stop paying into their pensions could be in for cash problems for later in life.

The Association is urging the Government do all it can with regard to new pension reforms by explaining the benefits of a pension and at the same time boosting confidence within the system.

US consumer confidence slumped in October, the Conference Board has reported.

The closely-monitored Consumer Confidence Index from the Conference Board dived to 39.8 this month from September’s reading of 46.4.

Not only was the reading less than forecasts of a level of 46.0, it was the lowest since March 2009, when the US was in recession.

Furthermore, the index remains far away from the 90 points required to show that the world’s largest economy is on solid footing.

Since the index commenced in 1967, the average reading has been 95.6.

The index hit a record high of 144.7 in 2000, while its all-time low was 25.3 in February 2009, when the country was in the midst of recession.

Commenting on the figures, Lynn Franco, director of the Conference Board Consumer Research Centre said: “Consumer confidence is now back to levels last seen during the 2008-2009 recession.

“Consumer expectations, which had improved in September, gave back all of the gain and then some, as concerns about business conditions, the labor market and income prospects increased,” she added.

Meanwhile, the present situation index, a measure of consumers’ assessment of current economic conditions, fell for the sixth month in a row to 26.3 from a revised 33.3 in September.

The report also showed that households are concerned about future incomes – raising doubt over spending – something which is closely monitored as it accounts for more than two-thirds of economic output.

The economic recovery in the US remains sluggish in the face of higher unemployment and a depressed housing market.

In other news this week, the Standard & Poor’s/Case-Shiller index showed that single-family house prices rose by just 0.2% in August on a monthly basis, while prices were 3.8% lower when compared with August 2010.

The latest survey from the Nationwide Building Society has revealed a fall in UK consumer confidence for the month of September.

The building society’s consumer confidence index fell for the fourth consecutive month, falling by 3 points to 45 in September – hovering dangerously close to the all-time low of 41.

Furthermore, it is 10 points lower than this time last year and way below the index average of 81.

According to the survey, 80% of consumers believe there will be no improvement in the economy over the next six months.

Commenting on the report, Robert Gardner, Nationwide’s chief economist, said: “The economy has hardly grown in 2011, and pressure has continued to mount on household budgets.”

However, he believes the re-introduction of quantitative easing, announced by the Bank of England, may boost confidence.

“This could translate into improved consumer confidence, if people believe these efforts will be successful in lifting the economy out of its current malaise,” Mr Gardner added.

The survey comes just days after the Office for National Statistics (ONS) revealed Consumer Price Inflation (CPI) accelerated to annual rate of 5.2% last month from August’s rate of 4.5%.

The rate represented the highest since September 2008 and it has never exceeded this rate since the CPI measure was first calculated in 1997.

Furthermore, last week, the ONS revealed UK unemployment rose sharply in the three months to August – rising to a 17-year high.

The ONS said unemployment rose by 114,000 in the three month period to 2.57 million, taking the unemployment rate to 8.1% – higher than forecasts.

Rising inflation and unemployment are putting further pressure on households’ budgets and this is likely to impact on spending, which could weaken economic growth further.

Official data has revealed unemployment in Germany dropped to its lowest level in more than 20 years in September.

The country’s unemployment rate fell from August’s rate of 7% to 6.6%.

Unemployment now stands at 2.79 million – the first time since 1992 that the jobless total has been below 2.8 million.

It was also much better than economists had expected.

The country’s unemployment rate continues to fall and its job market has performed much better than in many other countries and many believe it is the result of the “Kurzarbeit” scheme, introduced by the German Government, designed to prevent mass redundancies.

Last year, Germany’s unemployment rate plunged to 7.7% from 8.2% in 2009 as a result of the Government initiative.

Many economists believe that Germany’s economic recovery appears to have enough “domestic stamina” to prevent a recession.”

However, despite the strong data, the economy, which is the euro zone’s largest, continues to suffer amid the ongoing debt crisis.

Germany, which has been regarded as Europe’s powerhouse, has been driving the recovery of the euro zone but a recent slew of weak data has forced many to re-evaluate its assessment of the economy.

Statistics office Destatis recently revealed German exports fell more than expected in July.

According to Destatis, exports fell by 1.8% in July on a monthly basis compared with a 1.2% drop in June. Economists had forecast a 0.1% fall for the month.

The sharp fall in exports will be of grave concern for the country’s Government. Export demand helped to bring Germany out of recession in the second quarter of 2009 – much sooner than many of its counterparts throughout the world.

The Washington-based International Monetary Fund recently lowered its growth forecasts for both Germany and the euro zone this year and next.

It expects Germany’s economy to grow 2.7% this year and 1.3% in 2012.

Official data has revealed unemployment in Germany dropped to its lowest level in more than 20 years in September.

The country’s unemployment rate fell from August’s rate of 7% to 6.6%.

Unemployment now stands at 2.79 million – the first time since 1992 that the jobless total has been below 2.8 million.

It was also much better than economists had expected.

The country’s unemployment rate continues to fall and its job market has performed much better than in many other countries and many believe it is the result of the “Kurzarbeit” scheme, introduced by the German Government, designed to prevent mass redundancies.

Last year, Germany’s unemployment rate plunged to 7.7% from 8.2% in 2009 as a result of the Government initiative.

Many economists believe that Germany’s economic recovery appears to have enough “domestic stamina” to prevent a recession.”

However, despite the strong data, the economy, which is the euro zone’s largest, continues to suffer amid the ongoing debt crisis.

Germany, which has been regarded as Europe’s powerhouse, has been driving the recovery of the euro zone but a recent slew of weak data has forced many to re-evaluate its assessment of the economy.

Statistics office Destatis recently revealed German exports fell more than expected in July.

According to Destatis, exports fell by 1.8% in July on a monthly basis compared with a 1.2% drop in June. Economists had forecast a 0.1% fall for the month.

The sharp fall in exports will be of grave concern for the country’s Government. Export demand helped to bring Germany out of recession in the second quarter of 2009 – much sooner than many of its counterparts throughout the world.

The Washington-based International Monetary Fund recently lowered its growth forecasts for both Germany and the euro zone this year and next.

It expects Germany’s economy to grow 2.7% this year and 1.3% in 2012.

Official data has revealed unemployment in Germany dropped to its lowest level in more than 20 years in September.

The country’s unemployment rate fell from August’s rate of 7% to 6.6%.

Unemployment now stands at 2.79 million – the first time since 1992 that the jobless total has been below 2.8 million.

It was also much better than economists had expected.

The country’s unemployment rate continues to fall and its job market has performed much better than in many other countries and many believe it is the result of the “Kurzarbeit” scheme, introduced by the German Government, designed to prevent mass redundancies.

Last year, Germany’s unemployment rate plunged to 7.7% from 8.2% in 2009 as a result of the Government initiative.

Many economists believe that Germany’s economic recovery appears to have enough “domestic stamina” to prevent a recession.”

However, despite the strong data, the economy, which is the euro zone’s largest, continues to suffer amid the ongoing debt crisis.

Germany, which has been regarded as Europe’s powerhouse, has been driving the recovery of the euro zone but a recent slew of weak data has forced many to re-evaluate its assessment of the economy.

Statistics office Destatis recently revealed German exports fell more than expected in July.

According to Destatis, exports fell by 1.8% in July on a monthly basis compared with a 1.2% drop in June. Economists had forecast a 0.1% fall for the month.

The sharp fall in exports will be of grave concern for the country’s Government. Export demand helped to bring Germany out of recession in the second quarter of 2009 – much sooner than many of its counterparts throughout the world.

The Washington-based International Monetary Fund recently lowered its growth forecasts for both Germany and the euro zone this year and next.

It expects Germany’s economy to grow 2.7% this year and 1.3% in 2012.

According to the Land Registry, house prices fell by 0.3% in August after a 1.3% rise in July.

The latest fall takes the average cost of a home to £162,347 in England and Wales.

On an annual basis, meanwhile, the Registry said prices are 2.6% lower.

It must be noted that the Land Registry compiles its data from completed transactions and therefore lags behind other monitors of the housing market but is generally regarded as the most authoritative.

In comparison, the Halifax said house prices fell by 1.2% in August on a monthly basis, while the Nationwide said house prices fell by 0.6% in August.

Meanwhile, according to the Land Registry, the only region in England and Wales to see an increase in its average property value over the last year is London, where house prices are now 2.1% higher than this time last year.

In stark contrast, prices have fallen by 7.8% in the North East of England and by 5.5% in Wales over the same time period.

However, property in London is attractive to buyers from overseas as a result of the cheap pound.

Meanwhile, in terms of future house prices, a recent report from leading think-tank National Institute of Economic and Social Research (NIESR), predicted UK house prices will fall by 4.5% in 2011, followed by an average 1.5% fall in each of the subsequent four years.

According to the think tank, this year’s decline will reflect the squeeze on household finances resulting from higher taxes and rising inflation, and the ongoing lack of mortgage availability.

In related news this week, HM Revenue & Customs (HMRC) revealed a fall in the number of homes sold in August in the UK.

According to HMRC, 78,000 homes worth at least £40,000 or more were sold in the month – 6,000 less than the previous month and 3,000 lower than in August 2010.

However, August is traditionally regarded as a quieter month due to the holiday season.

At the height of the housing boom in July 2007, 151,000 homes were sold.

Today’s figures from the Land Registry, along with other recent reports, suggest the housing market will remain depressed throughout the remainder of the year.

The price of spot gold fell further today – to a 2½-month low of $1,624 – after reaching a record high of $1,920.94 a troy ounce earlier this month.

This represents the sharpest drop since March 2009 – in the aftermath of the collapse of US bank, Lehman Brothers.

Gold is now down 9% from its record high as investors no longer see the precious metal as a safe haven.

However, it is still up around 20% for the year to date.

Prices of other precious metals also fell, with silver down 5.3% to $29.39 – its lowest level for seven months.

The fall in the price of gold was attributed to strong gains by the US dollar – the two typically move in the opposite direction.

Commodities such as gold lose their appeal to investors when the dollar strengthens because those asset classes become more costly to buyers from overseas.

One analyst said the precious metal could fall to $1,582 in the short term, but is optimistic for its long-term prospects, with some expecting it to hit a high of $2,000.

According to analysts, investors are likely to monitor developments on the global economy before investing further into gold since its recent volatility makes them nervous.

Back in July, many investors said it would reach as high as $1,700 an ounce by December and at the time, the surge in the price of gold was linked to ratings agency Moody’s reviewing the US’s AAA debt rating, warning there was a growing likelihood the US will default on its debt obligations.

Furthermore, many were concerned about the ongoing debt crisis in the euro zone and this sent the US dollar tumbling and the price of gold soaring.

Investors remain concerned about the euro zone sovereign debt crisis but today shares have rallied after G20 talks at the weekend proposed an action plan for the debt-laden nation.

A report from the Washington-based International Monetary Fund (IMF) suggests that fresh action for the euro zone debt crisis is underway, which will prevent the crisis from spreading and impacting on the global economy.