Europe’s biggest economy is teetering on the brink of recession as Brexit worries spread beyond Britain, forcing central bankers to ponder emergency action.

German industrial production tumbled by 0.6% in July, shock figures on Friday revealed, a result that was far worse than economists had predicted.

Some said a recession in what is regarded as the powerhouse of European growth is now all but certain.

That puts pressure on Chancellor Angela Merkel and on the European Central Bank, which meets next week to consider a fresh economic stimulus package, which could include further cuts to interest rates.

Merkel is in Beijing for talks with Chinese president Xi Jinping. Germany has not suffered a recession since 2009, when the fallout from the financial crisis biffed all major economies.

The factory slowdown comes on top of figures two weeks ago which show German GDP falling by 0.1% in the second quarter.

Analysts had been expecting industrial production to rise by 0.3% in July, but lower orders from Britain and the fallout from the US-China trade war hit business.

Year on year, production is down 4.2%.

VP Bank analyst Thomas Gitzel said: “The misery in manufacturing continues. The decline in new orders significantly increases the risk of a recession for the German economy.

“The danger is great that negative growth will also be recorded in the third quarter,” Gitzel added.

Claus Vistesen of Pantheon Macroeconomics says today’s industrial output data means Germany is almost certainly going to enter a recession.

“The July industrial production headline combined with the dreadful retail sales number now send a convincing signal that the German economy is in recession. The August and September numbers could still spring upside surprises, but we don’t have high hopes.”

Analysts at ING were gloomier. They told clients: “The prospects for German industry remain bleak. Even with a magnifying glass, it is impossible to find signals of an imminent rebound.”

Simon French at Panmure Gordon said: “The German economy is flatlining. Its heavy reliance on international trade and the slowdown in global demand for new cars has hit output this year. There is a decent chance that the economy will fall into recession during the third quarter.”