Tens of thousands of manufacturing jobs could be lost the Confederation of British Industry has predicted.

The warning came as export confidence among manufacturers reached its lowest level in three years.

The south east is set to bear the brunt of job losses which will be "severe even by UK standards", according to the CBI.

In a further setback to the south east, new figures question London's claim to be at the forefront of the housing boom.

Official Land Registry figures, published on Wednesday, confirm that national house price inflaton is in double-digits, with the average price of a home in England and Wales up 10.8 per cent in the second quarter, to £117,398.

But prices in the capital are lagging behind at 6.5 per cent placing London second from bottom of the regional price league - ahead of only Wales. The average house price in the capital is now over £200,000.

With reports that the UK arm of Ford cars is heading towards record losses of £500 million, the CBI's quarterly regional industrial trend survey forecast job cuts of up to 29,000 - 8000 of which are expected to be in the south east.

The latest gloomy economic indicator follows the sector's official slide into recession in figures published on Monday.

CBI economist Sudhir Junankar said: "The global slowdown is now hitting UK manufacturing hard with firms in virtually all UK regions experiencing falling orders, output and employment with severe pressure on profit margins".

The CBI believes that the latest grim prognosis for the UK economy indicate that last week's interest rate cut was "clearly justified'' and may lead to further interest rate reductions if the manufacturing slowdown knocks on to consumer demand and service sector growth weakens.

The survey reported sweeping manufacturing job cuts in the north east, east Midlands, the north west, Yorkshire and Humberside.

Thirty six per cent of firms surveyed said they were negative about employment prospects and just nine per cent were positive - the lowest level for expectations in the sector since January 1999.

Recession worries for Germany - the eurozone's biggest economy - are growing following a rise in unemployment for the seventh month running.

Industrial production fell by 0.4 per cent in June. The figures have caused increased pessimism among EU member states about Europe's ability to ride out a US-led slowdown.