Industrial growth slowed to 2.7 per cent in August due to poor show by the manufacturing sector and contraction in capital goods output. This may prompt the Reserve Bank to cut key interest rates in its second quarter policy review later this month.According to the official data released today, industrial output in the April-August period this fiscal was 0.4 per cent, down from 5.6 per cent in the same period in 2011-12. Growth in overall factory output, as measured by the Index of Industrial Production (IIP), was 3.4 per cent in August last year.While the manufacturing sector, which constitutes over 75 per cent of the index, grew at slow rate of 2.9 per cent in August, as against 3.9 per cent in the same month last year. However, the production growth in the manufacturing sector in April-August was flat, as against 6 per cent growth in the same period in 2011-12.