U.K. Registers Largest GDP Decline In 18 Years; Deeper Recession Foreseen

London, England (AHN) - Sharp declines in outputs of hotels, restaurants, the financial sector, manufacturers and auto makers led to a 0.6 percent decline in the United Kingdom's gross domestic product in the third quarter. It was the largest dip since 1990.

The figures, which were worse than anticipated, points to a prolonged and deep recession for Britain. Government forecast was a 0.5 percent shrinkage for July to September.

Data from the Office for National Statistics showed that for the same quarter household spending went down 0.2 percent even if many Britons went on a pre-Christmas shopping spree, while savings inched up.

Brian Hillard, chief U.K. economist of Societe Generale, said, quoted by the U.K. Telegraph, "This means the recession is deepening and consumers are saving more. That is a pretty clear sign that we're going to get a bigger fall in output in the fourth quarter."

Matthew Sharratt from Bank of America added, quoted by Guardian Unlimited, "It's essentially showing that the recession was somewhat worse already in the third quarter than we had previously thought... The decline we are likely to see in the fourth quarter and first quarter of next year will be substantially worse than what we have seen in the third quarter. It really does paint an exceptionally gloomy picture about the speed with which the U.K. economy has lapsed into recession."