Nicola Boden and Sam Fleming
UK Daily Mail
Friday, Oct 24, 2008
Britain is officially on the brink of recession after new figures revealed the economy has shrunk for the first time in 16 years.
Output dropped by 0.5 per cent between July and September in its biggest decline since the end of 1990 when the country was emerging from the last downturn.
The scale of the slowdown astonished economists who had predicted a reduction of less than half that at 0.2 per cent.
It means the UK is almost certain to be in a technical recession, classed as two quarters of negative growth, by the end of the year.
Shares plunged again after the data was released, having already shed more than five per cent in early trading amid warnings the downturn could be the worst for 50 years.
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The FTSE-100 dropped to be almost nine per cent down. The pound also fell to a new low of $1.55 due to speculation rates will have to be slashed more than expected.
There were also huge losses in Asia overnight as fears of a global recession intensified.
HSBC and Standard Chartered were among the worst affected stocks in the UK today because of their heavy involvement in emerging markets.
The last time the economy shrank was back when Tory Prime Minister John Major was in power and before the Black Wednesday plunge.
This article was posted: Friday, October 24, 2008 at 3:53 am