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The output of Britain's manufacturing industries rose slightly at the end of 2006, official figures have revealed.

According to the Office for National Statistics, output was up 0.2 per cent in December against November's total.

But for 2006 as a whole, overall industrial production was 0.1 per cent lower than the 12 months that preceded it.

Ahead of tomorrow's eagerly-awaited interest rate decision by the Bank of England, economists are divided on whether the monetary policy committee (MPC) will hold base rates at 5.25 per cent or increase them by a further quarter of a percentage point.

Richard Snook from the Centre for Economics and Business Research claims that Britain's relatively weak production sector will not deter the MPC from raising rates; insisting that the need to curb inflation overrides any such failings.

"The Bank is keen to reassert its credibility with swift and decisive action in order to prevent the emergence of a wage-price spiral," he said.

Howard Archer, chief UK and European economist at Global Insight, agrees that the strong pound and higher interest rates are having a "dampening impact" on the country's manufacturing sector, but says that today's data is unlikely to sway the Bank's decision either way.

"We believe it remains an extremely tight call and suspect that even if the MPC does not act this week, it will only be a temporary reprieve," Mr Archer explained.