The UK economy is contracting at a much faster pace than appeared likely just a few weeks ago, one of Britain’s top economic forecasters said Tuesday, after official figures showed industrial output in October fell at its fastest rate for nearly six years. The National Institute of Economic and Social Research said that after reviewing the latest data, it believed the economy shrank by 1.0% in the quarter to November, and will prove to have contracted by even more for the fourth quarter. In the quarter to September, the economy contracted by 0.5%, with the latest forecast suggesting activity was shrinking at twice the rate of just a few months ago. Official data showed industrial output fell by 1.8% in the quarter through October, compared with the previous quarter. The FT also reports that the UK’s trade deficit in goods and services is estimated to have widened in October by £3.9bn fron £3.5bn in October and that UK house sales continued falling in November, with the average number of transactions hitting a record low.

This entry was posted by Gwen Robinson on Wednesday, December 10th, 2008 at 5:47 and is filed under Capital markets. Edit this entry.