Recession to hit Britain harder than expected

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The Independent Online

The UK economy shrank more sharply than first thought between July and September, official figures showed.

Output fell by 0.6% during the third quarter of 2008 - a bigger slide than the 0.5% first estimated, the Office for National Statistics (ONS) said.



The decline - the biggest for 18 years - came after steeper than expected falls in output from the UK's powerhouse services sector.



The detailed figures released left UK output for the second quarter of the year unchanged at 0% - a stagnation which ended a run of 63 successive quarters of growth stretching back to 1992.



But statistics also revised up GDP output figures for the last three months of 2007 and the first quarter of 2008 - accelerating the pace at which the ailing UK economy has declined since then.



The UK's recession is set to be officially confirmed in January when the ONS's first estimates show a further economic decline in the final three months of this year, representing two successive quarters of negative growth.



Figures showed a bigger than first estimated 0.5% fall in services output, which represents almost three-quarters of the UK economy.



Hotels and restaurants and business services firms took the biggest hit as the services sector's output fell at the sharpest pace since the third quarter of 1990.



A worse than expected performance from the manufacturing sector also caused the decline in output from production to be revised to 1.4% from 1.1% between July and September.



Household spending declined by an unrevised 0.2% between July and September. This followed a 0.3% fall in the second quarter - representing the first decline in spending in successive quarters since 1995 - as hard-pressed shoppers cut back on food and drink and big-ticket items such as cars.

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