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Contraction of economy speeds up

2008-12-23 05:07:17

The UK economy shrank faster between July and September than had previously

been thought, official data showed.

The Office for National Statistics (ONS) said it had contracted by 0.6% in the

quarter - its previous estimate had been a contraction of 0.5%.

The previous quarter was left unrevised at a figure of zero growth.

The economic growth figures are closely watched because two consecutive

negative figures are generally thought to indicate a recession.

The service sector was among those hit in the third quarter, shrinking by 0.5%,

having grown by 0.2% in the previous three months.

The situation was even worse in the manufacturing sector, where output shrank

by 1.4% in the period.

Mortgage gloom

The government will produce its first estimate of growth between October and

December early in the New Year.

The zero growth figure in the second quarter ended a run of 63 consecutive

quarters of growth, which began in 1992.

Meanwhile, there was more gloomy news on the housing front, as mortgage

approvals reached a new record low in November.

The number of mortgage approvals for house purchases fell by 14% in November to

17,773, according to the British Bankers' Association.