(RTTNews) - The pound traded lower against the currencies of the U.S. and Swiss franc on Thursday after a report showed that the U.K. manufacturing activity fell to its lowest level in more than two years in August. Growth in British manufacturing sector eased to a 26-month low in August, driven by a fall in production, new orders and employment, latest survey results from Markit Economics showed today. The latest slump in factory activity has revived concerns of a double-dip recession. The headline Markit/Chartered Institute of Purchasing & Supply (CIPS) purchasing managers' index, a measure of the health of the manufacturing sector, fell to 49 from 49.4 in July. The figure matched economists' forecast. A PMI reading below 50 suggests contraction of the sector. At the same time, the Nationwide Building Society report showed that the U.K. house price index dropped a seasonally adjusted 0.6 percent from a revised 0.3 percent increase in July. Economists had expected the index to remain unchanged. Year-on-year, house prices dropped 0.4 percent in August. Meanwhile, the British Chambers of Commerce downgraded its U.K. economic growth for 2011 at 1.1 percent, down from the prior projection of 1.3 percent, citing impact from worsening global prospects. The pound fell below the 1.62 level against the US dollar following the PMI and the pair thus reached its lowest mark since August 12. The next downside target for the cable is likely to be seen around the 1.6170 level. Against the Swiss franc, the pound slipped to a 6-day low of 1.2921 following the data and the pair leveled off thereafter. If the pound weakens further, it may target support around the 1.2870 level. The Swiss franc gained as Swiss National Bank's refraining attitude from further currency interventions and mounting concerns that the global economy is entering back into recession after a contraction in the eurozone PMI boosting safe-haven flows into the currency. Swiss economy expanded 0.4 percent quarter-on-quarter in the second quarter and 2.3 percent annually, data from the State Secretariat for Economic Affairs, or SECO, showed today. The figure matched economists' forecast. Meanwhile, Switzerland's retail sales dropped 3.4 percent in real terms in June, after having risen 7.6 percent in the previous month. Annually, retail sales rose 1.9 percent in July, after a 7.9 percent gain in the previous month. The SVME Association of Purchasing and Materials Management and Credit Suisse report showed that the seasonally adjusted Purchasing Managers' Index (PMI) slipped to 51.7 in August from 53.5 in July. Economists were expecting a fall to 51.

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