The United Kingdom economy shrank faster between July and September than had previously been thought, official data showed. The Office for National Statistics (ONS) said it had contracted by 0.6% in the quarter - its previous estimate had been a contraction of 0.5%.
The previous quarter was left unrevised at a figure of zero growth. The economic growth figures are closely watched because two consecutive negative figures are generally thought to indicate a recession. The service sector was among those hit in the third quarter, shrinking by 0.5%, having grown by 0.2% in the previous three months. The situation was even worse in the manufacturing sector, where output shrank by 1.4% in the period. The British government will produce its first estimate of growth between October and December early in the New Year. The zero growth figure in the second quarter ended a run of 63 consecutive quarters of growth, which began in 1992. Meanwhile, there was more gloomy news on the housing front, as mortgage approvals reached a new record low in November. The number of mortgage approvals for house purchases fell by 14% in November to 17,773, according to the British Bankers' Association. There were also trade figures released, with the current account deficit coming in at £7.7bn between July and September, compared with £6.4bn in the previous quarter. Current account is the difference between a country's total exports of goods and services and its total imports of them, and also includes financial transactions. The deficit was smaller than expected, "but this will probably still leave a current account deficit of 3% to 4% of GDP this year, so any relief for the ailing pound is likely to be mild," said Jonathan Loynes at Capital Economics. There were also productivity figures, which showed that output per worker fell 0.2% in the third quarter, compared with the same quarter a year ago, as the economy shrank faster than it laid off workers.