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28 October 2009 Britain remains in longest recession on record

Britain’s economy unexpectedly contracted in the third quarter of this year, making the current recession the longest on record.

Data released by the Office for National Statistics shows that output fell by 0.4% between July and September, quashing hopes that the downturn is over.

Analysts had expected the economy to grow by around 0.2%, but a surprising slump in the services sector means that it has now shrunk for six consecutive quarters.

Recent falls in retail sales and industrial output are also thought to have contributed to the decline.

The economy has shrunk by 5.9% since the recession began, prompting speculation that the Bank of England may now extend its quantitative easing programme.

James Knightley at ING said the figures were ‘awful with no positive news’.

‘This clearly suggests that the likelihood of an expansion in quantitative easing by £50bn or so over the next quarter is rising, although [it] is not a foregone conclusion,’ he added.