Businesses are facing a downturn in demand similar to the levels faced during pandemic and 2008, Lloyds has warned, as bosses prepare to face potentially the 15th consecutive increase in interest rates this week. 

New orders declined in nearly every sector of the British economy in August for the second month in a row, a closely watched survey showed. 

Lloyds said this had only happened during the 2020 lockdown and at the time of the global financial crisis in 2008. 

The industries feeling the sharpest drops in interest from buyers were chemicals and automobiles and auto parts. 

Only software services bucked the trend and eked out some growth, according to the Lloyds Bank UK Sector Tracker.

Nikesh Sawjani from Lloyds said the figures suggested the economy was experiencing “a widespread fall in demand, similar to what we saw during very challenging periods for the UK economy”.

He added that the signs of weakening demand suggested that higher interest rates were working as intended and the Bank of England would not need to raise rates much further.

Threadneedle Street’s rate-setters will on Thursday vote on whether to increase interest rates for the 15th time in a row, after lifting borrowing costs from 0.1pc in December 2021 to 5.25pc.

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