UK economy still reeling under recession, says ONS study

Belying analysts' expectations of growth during the quarter, the UK economy has contracted by 0.4 per cent between July and September, and by 5.9 per cent overall in the last year, according to the first estimate of the Office for National Statistics (ONS).

Other bigger economies of Europe, such as France and Germany had exited recession in the second quarter of this year (See: Germany, France drive Euro-zone recovery).

It is the first time UK gross domestic product (GDP) has contracted for six consecutive quarters, since quarterly figures were first recorded in 1955.

GDP measures the total amount of goods and services produced by a country.

Quarterly growth of 0.2 per cent had been expected in ONS figures, although expectations had been tempered by recent figures showing no growth in retail sales in September and a 2.5 per cent decline in industrial output in August.

The unexpected decline in the services sector was the key factor behind the drop, with the distribution, catering and hotels sector performing particularly badly.