Slump Drags on as Service Output Drops

The economy shrank by a worse-than-expected 0.2% between July and September, as Britain’s record recession dragged on. Experts had predicted a 0.1% third-quarter decline but a fall in output in the services sector dragged the economy lower, the Office for National Statistics said.
The gloomy figures confirm a sixth successive quarter of recession, with Britain’s loss of output ever since the slump began last year standing at 6%. That is on a par with the slump at the start of the 1980s.
The British Chamber of Commerce said the figures raised concerns about the strength of any recovery. The 0.2% fall represents a shallower decline than the 0.3% previously estimated by the ONS. But economists had expected a stronger performance due to the promising figures from the construction industry. The ONS said service sector output fell 0.2% for manufacturers. There were some bright spots such as a 0.7% output rise from hotels and catering.
Previous quarters were also revised down by the ONS. The economy shrank by a larger than previously thought 0.7% between April and June and by 0.9% in the third quarter of 2008. Meanwhile, the share of income put aside by families, rose to an 11-year high of 8.6% in the third quarter.