HOPES for an end to recession were dashed today after new figures showed the economy shrank for a record sixth quarter in a row between July and September.
The shock 0.4% third-quarter fall takes the total loss of output since the recession began last year to 5.9%, the Office for National Statistics (ONS) said.
Experts predicted a 0.2% advance for the economy, but today’s figures leave the UK in the grip of the longest period of continuous decline since ONS records began in 1955.
The estimates mean the depth of the current slump is nearing the 6% decline seen between 1979 and 1981.
The persistent decline of the ailing economy comes despite interest rates at a record low 0.5% since March, economic stimulus moves from the Government and an unprecedented £175 billion boost to the money supply through quantitative easing.
Although figures such as Chancellor Alistair Darling and Bank of England governor Mervyn King expect some modest growth by the end of this year, pressure on the economy will intensify in 2010 as stimulus measures such as the temporary VAT cut and the "cash-for-bangers" scrappage scheme come to an end. Unemployment is also steadily rising towards three million.
Today’s figures showed the pressure on hard-hit consumers during the period with output from distribution, hotels and restaurants down by 1%.
Overall service output, which represents almost three-quarters of the UK economy, was expected to register growth but instead disappointed with a 0.2% decline over the quarter.
The construction sector also remained in the doldrums, falling 1.1% during the period. The beleaguered industry has now contracted by a mammoth 14.7% since the beginning of 2008.
Industrial production output, meanwhile, shrank by 0.7% and is down by 13.7% since the recession began.
Today’s figures have been compiled with around 40% of the required data and could be subject to changes in the next two months when more information has been gathered.
The ONS’s first estimate for output between April and June was first estimated at minus 0.8%, and subsequently revised upwards to minus 0.6%.