This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/7749729.stm
The article has changed 3 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Data confirms economy shrinking | Data confirms economy shrinking |
| (21 minutes later) | |
| The UK economy did indeed shrink 0.5% between July and September, the Office for National Statistics has confirmed. | The UK economy did indeed shrink 0.5% between July and September, the Office for National Statistics has confirmed. |
| Sticking to the same figure it initially announced last month, it is the first time the UK economy has contracted since 1992. | Sticking to the same figure it initially announced last month, it is the first time the UK economy has contracted since 1992. |
| If the economy shrinks again between October and December then the UK will officially be in recession. | If the economy shrinks again between October and December then the UK will officially be in recession. |
| Separate figures showed that household spending fell 0.2% in the third quarter, the biggest drop since 1995. | |
| The Office for National Statistics (ONS) added that it was also sticking to its earlier estimate that the UK economy expanded just 0.3% year-on-year between July and September, compared to the same quarter in 2007. | |
| Rate cut hopes | |
| Returning to the third quarter, it said the fall in output had been led by a sharp decline in sales of cars and household goods. | Returning to the third quarter, it said the fall in output had been led by a sharp decline in sales of cars and household goods. |
| Taken together, the overall retail, hotels and catering sectors declined 1.9%, the sharpest fall since 1980. | |
| "There is nothing here to suggest that the economy is not going to carry on contracting for a prolonged period," said Jonathan Loynes, chief European economist at Capital Economics. | |
| The figures will increase expectations that the Bank of England will further cut interest rates in December. | The figures will increase expectations that the Bank of England will further cut interest rates in December. |
| Earlier this month it reduced rates by 1.5 percentage point to 3%. | Earlier this month it reduced rates by 1.5 percentage point to 3%. |
| The latest ONS data comes two days after Chancellor Alistair Darling said in his pre-Budget report that the UK economy will likely contract for the next four quarters. | |
| Mr Darling now estimates that economic output will decline between minus 0.75% and minus 1.25% in 2009. | |
| However, he expects growth to return in 2010 as the economy recovers. | |
| Other international forecasts, such as that released by the OECD on Tuesday, suggest that the UK recession will be longer and deeper than that in other major economies. |