Britain's main manufacturing lobby, Make UK, told the government to stop "short-term gimmicks" and cut taxes for the sector, as its members reported a significant slowdown in orders and a nose-dive in investment.

Make UK said it expected factory output to grow 2.3% this year - down from a forecast of 3% three months ago - and slow further to 1.7% in 2023, as manufacturers battled surging raw material costs and higher staff pay demands.

The Paris-based OECD forecast this month that Britain will see the weakest growth next year of any major economy other than Russia, as well as persistent inflation.

Higher costs had led to a particularly big retrenchment in British manufacturers' investment plans over the past three months, according to Make UK's members.

Stephen Phipson, Make UK's chief executive, warned of "very stormy waters" ahead and said years of "political chaos and uncertainty" since the 2016 Brexit referendum had also taken their toll on investment.

"As a result, there is an urgent need to move away from the weekly roster of short-term gimmicks and put in place a long-term economic plan," he said.

Britain's government is raising the main rate of corporation tax next year, but has said it will review incentives for business investment before then, as a temporary COVID-era investment incentive is due to expire.

Make UK said it wanted a 12-month reduction in business property taxes, value-added tax waivers, reductions in energy taxes and an extension of the investment 'super-deduction' that will soon expire.

(Reporting by David Milliken, editing by Elizabeth Piper)