Britain's manufacturing sector growth eased in December as worries about the credit crunch led to new orders hitting a near two-year low, a survey shows.

    The purchasing managers' index fell to 52.9 in December, below the 53.6 that analysts forecast and down from the 54.3 recorded in November, according to a survey by the Chartered Institute of Purchasing and Supply published Wednesday.

    But the index remained above the 50.0 mark separating growth from contraction for the 29th successive month.

    The new orders index fell sharply to 51.7, its lowest since March 2006, from 55.0 in November, the survey showed.

    The survey also indicated that the inflationary pressures facing the sector are easing although prices remain high.

    Companies have paid higher prices for food products, fuel, metals, paper products, plastics and oil over recent months.

    The data is likely to boost hopes for further interest rate cut to cushion against an economic slowdown this year.

    The Bank of England's Monetary Policy Committee cut interest rates to 5.5 percent from 5.75 percent last month and many economists expect the central bank to lower the cost of borrowing further in coming months.