UK manufacturers have recorded the sharpest drop in factory output for more than six years amid mounting concerns over Brexit, as growth in consumer borrowing eased to the lowest level in more than five years.

The monthly snapshot from IHS Markit and the Chartered Institute of Procurement and Supply showed that activity levels in the UK manufacturing sector dropped to the lowest level since February 2013 in June, as firms scaled back their orders due to existing high stock levels.

Firms had previously rushed to stockpile goods and materials ahead of the original Brexit deadline on 29 March before Theresa May agreed to push back the date until the end of October. After providing a boost to economic growth, manufacturers are now either adequately stocked or may run down their supplies, dragging on output.

The IHS Markit/Cips manufacturers purchasing managers’ index (PMI) plunged to 48.0 in June, down from 49.4 a month ago and dropping well below the forecasts made by City economists. Anything above 50.0 separates economic growth from contraction.

The survey found that high stock levels, ongoing Brexit uncertainty, a deteriorating economic backdrop and rising competition contributed to the drop in output. Weak export demand amid a faltering global economy also had an impact.

Manufacturing output has recently slowed across the eurozone, raising questions over the strength of the European economy amid weaker global trade flows as the US-China trade war serves as a brake on growth. Factory output has slipped into reverse in Ireland, Italy, Spain, Austria and Germany.

The gathering signs of a slowdown in the British economy came as separate figures from the Bank of England showed the weakest growth in personal borrowing across the country for more than five years.

Annual growth in borrowing on credit cards, overdrafts and personal loans eased to 5.6% in the year to May, down from 5.9% a month ago and marking the smallest rise since April 2014. Figures last month showed that retail sales fell by 0.5% in May, the biggest drop in spending this year.

Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

The slowdown could reflect weaker demand among consumers to borrow money to buy goods and services, holding back the economy. Borrowing rose by £822m in May, below economists’ forecasts for growth of just under £1bn.

The weaker expansion could, however, allay concerns at the Bank over an unsustainable consumer credit bubble. Households had driven up their borrowing at growth rates of more than 10% as recently as 2016, racking up a debt mountain bigger than the one seen before the financial crisis.

Households have over recent months gradually been able to rebuild their finances, as inflation fades and wage growth accelerates to the fastest pace in more than a decade, enabling them to spend without taking on as much debt.