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/7686552.stm

The article has changed 21 times. There is an RSS feed of changes available.

Version 8 Version 9
Recession looms as economy slows Recession looms as economy slows
(20 minutes later)
The economy shrank for the first time in 16 years between July and September, confirming that the UK is on the brink of recession.The economy shrank for the first time in 16 years between July and September, confirming that the UK is on the brink of recession.
Economic output fell by 0.5%, according to the Office for National Statistics, amid fears of a global slowdown and huge volatility on world share markets.Economic output fell by 0.5%, according to the Office for National Statistics, amid fears of a global slowdown and huge volatility on world share markets.
The UK will be classed as being in recession if the economy slows in the fourth quarter as well.The UK will be classed as being in recession if the economy slows in the fourth quarter as well.
The credit crisis has forced consumers to tighten their belts.The credit crisis has forced consumers to tighten their belts.
Analysts had forecast a fall of 0.2%. Shock fall
This is the biggest fall in UK gross domestic product (GDP) since the first quarter of 1990. What's the real impact of the economic slowdown? BBC News is taking the temperature across the UK in a special day of coverage class="" href="http://news.bbc.co.uk/1/hi/in_depth/business/2008/downturn/default.stm">Special report: The downturn The fall is far greater than expected and increases expectations of further interest rate cuts from the current level of 4.5% to ignite growth.
The 0.5% fall is the biggest fall in UK gross domestic product (GDP) since the first quarter of 1990 and is much greater than analysts had predicted. What's the real impact of the economic slowdown? BBC News is taking the temperature across the UK in a special day of coverage Special report: The downturn
GDP was 0.3% higher compared to the same period last year, the weakest rate of growth since the second quarter of 1992.GDP was 0.3% higher compared to the same period last year, the weakest rate of growth since the second quarter of 1992.
The data is likely to increase expectations that interest rates will fall further. The Bank of England cut interest rates by 50 basis points to 4.5% earlier this month. The services sector - which represents three quarters of the UK economy - fell 0.4%, the biggest drop in 18 years. Within the services sector, hotels and restaurants saw the biggest fall, down 1.7%, compared with an increase of 0.2% in the previous quarter.
UK shares tumbled further on the news, down 6% at 3843 just after the release of the data. Manufacturing output fell 1% while construction tumbled 0.8% compared to the previous quarter.
Market fear
UK shares tumbled further on the news, down 6% at 3843 points just after the release of the data.
DEFINING A RECESSION A recession is widely accepted as a decline in a country's domestic economic output or GDP for at least two consecutive quarters The layman's finance crisis glossaryQ&A: What is a recession?
The pound was also affected, falling to $1.5889 - the first time it has fallen below $1.60 in the past five years.The pound was also affected, falling to $1.5889 - the first time it has fallen below $1.60 in the past five years.
"The fact that GDP contracted is no surprise but it's a big shock that the decline is as large as 0.5%. It's truly dire," said Philip Shaw at Investec.
"News since the end of September has hardly been encouraging and the UK may well experience a recession that is significantly deeper than we had expected before," he said.