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Gordon Brown's economic revival lay in tatters as shocking figures showed the economy slumped 0.4%.
Official figures showed the worst recession since the Thirties continued between July and September in a devastating blow to the Government.
The figures were far worse than expected in Westminster and the City and put the UK into the longest recession on record.
The Office for National Statistics said the economy shrank by 0.4% between July and September leaving Britain lagging behind other major nations in terms of recovery.
The UK has now been in decline for a record six consecutive quarters having plunged into recession in April last year.
France and Germany have already returned to growth and the UK is now lagging behind other major nations in terms of recovery.
The figures, which defied expectations in the City of growth of 0.2 per cent, were a devastating blow to Prime Minister Gordon Brown who has pinned election hopes on his handling of the economy.
Philip Shaw, chief UK economist at Investec, said: “This is very disappointing. The economy is still in recession. Nonetheless, the likelihood is that the UK will begin to grow later in the year. All is not lost.”
Reader views (27)
Jack Spratt,
Perhaps what your accountant has missed is that because of the way the tax rates and allowances work you'll be paying 61.5% on some of your income a long time before you start paying the additional (not higher rate, which remains at 40%)rate of 50%. Suddenly those "craptops" look a bargain.
- Mark, South-East London, 23/10/2009 13:40
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Have faith you people, and relax; tomorrow someone will tell us we are booming again.
- Mickinlondon, london, 23/10/2009 13:26
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In some respects this is good - it will hopefully illustrate to anyone who voted, or are considering to vote, labour that socialism (in any guise) does not work. Never has and never will.
- Andy, London, 23/10/2009 13:25
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The longer the recession goes on the more indebted we become and the more likely the need to call in the IMF. Gordon`s scorched earth policy of unlimited spending will be with us for generations. For those who keep repeating the Labour mantra of spending to get out of recession - we will be paying colossal interest payments for years to come, that is money that we can`t spend on schools, NHS, transport, etc. It will be a brake on growth over next 5 yrs even when we emerge from recession and is merely money being thrown at us to vote labour.
- Nickspurs, London, 23/10/2009 13:24
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It has been a depression since 1997 ever since mendacity Blair became PM and continued through the period of PM gloom & bust Brown.
Bring on the general election and let us rid the country of this communist influenced trash Labour government.
- Chas, Dagenham, UK, 23/10/2009 13:23
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Britain is best place to weather the storm.This comes from a man who only has one eye on the ball'
- Miguel Vargas, London, 23/10/2009 13:18
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The temporary reduction in Vat will end shortly and it will have done little to help British industry. The shortfall in tax receipts will result in higher taxation with a 50 % income tax just one of many measures. My accountant only today is advising new laptops and whatever as a means to reduce profits. I am not happy to spend more on imported electronic junk in this way.
- Jack Spratt, Richmond, Surrey, 23/10/2009 12:42
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The recession is over, its a depression now, when will they call it what it is...
- Mike, London, 23/10/2009 12:35
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Did anyone really expect a useless chancellor to be anything more than a useless PM? Get the unemployed of the streets now - join the army and go to Afghanistan to support another corrupt useless government.
- Frederick, London, 23/10/2009 12:30
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Still in recession with all liquidity pumped into the system, must be even worse than predicted. Still 10 years of NICE (non inflationery consumer expansion) requires an equivalent amount of lean years, harvest and famine and all that!
- Mattk, Ware, 23/10/2009 12:10
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It's been obvious for months that the recession has a long way to go. All this Labour PR spin to try & kickstart it by leaking good news has just failed miserably (like all of Labour's other policies!).
Those looking to the financial markets to see that yes they have recovered are rather foolish as the markets function as always to the tune of the corrupt people who run them and bear little resemblance to the real world.
Obviously companies will make decent profits as most have cutdown to a shoestring their operating costs (staff & or infrastructure usually!).
Look for end of Q1 2010 or start of Q2 to see the first realworld signs of a jump to positive GDP again and then give it another 6-9 months before this produces any tangible benefits as always it takes a longtime before this filters back into the economy so you are probably looking at 18 months minimum and before then you have to hope & pray that the xmas bloodbath on the high st does not cause an even deeper downturn!
- Jt, London, England, 23/10/2009 11:57
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The government is in "Cloud Cuckoo Land" if they had thought that we had turned the corner. Savers are the backbone of our economy as it is their money which funds morgage providers with cash. But consider this, Interest rates are now rubbish, for the working person there is no advantage in saving say £10,000 as at the end of the year at 2% you get £200, whereas 2 years ago at 5% it would bring in £500. This is one of the reasons we are in recession those millions of people who have worked all their life and amassed savings have seen their interest evaporate so they have stopped spending. I have,
and in fact at 66 I have an interviw next week at minimal wage.
- Nosmo King, Brighton, 23/10/2009 11:50
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Val Daniels and Keith Price.
Your Hero Gordon Brown claimed to have abolished Boom and Bust. You agreed with this claim at the time no doubt but now refuse even to remember it.Typical Double Think of the left I say.
Basically this government has failed and is discredited.It's time for it to go and very few will mourn its passing.
- Andrew, Ely UK, 23/10/2009 11:50
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Its been hilarious the amount of people that hae been saying we are out of recession recently, its not even begun! We are all about to pay for those idiots that want everything before they can afford it.
- John Entwistle, Hertford, England, 23/10/2009 11:43
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Gormless Brown spouted: "We are well-placed to overcome the recession".
China has already returned to OVER 8% growth.
WHAT DO YOU EXPECT WHEN PARASITE MP's ARE GRABBING £100,000,000.00 pa IN OBSCENE EXPENSES?
WHAT DO YOU EXPECT WHEN GORMLESS BROWN IS STILL BORROWING £500,000,000.00 EVERY DAY - REPAYABLE IN 2050!!
The UK is now a stinking cesspit Third World banana republic Police State gone mad.
- Reuben Camara, Morecambe Compound, EUSSR, 23/10/2009 11:23
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broon a bigger liar than bliar...
- Amoreno, Luxembourg, 23/10/2009 11:23
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I'm not surprised, all doom and gloom on every online newspaper coming out of the UK.
I'm so glad I left 15 years ago.
- Luke Munnerly, Sydney, Australia, 23/10/2009 11:01
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The only thing that will boost the economy and confidence of the consumer is a change of government.
- Frank, Home Counties, England., 23/10/2009 10:58
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It is now quite immaterial as to when the economy emerges from recession . Gordon Brown,the saviour of the World,his Chancellor and Labour Government have already wreaked havoc on the economy and the Country.What an inheritance they are leaving the next Government.It is going to take years of painful measures to restore the economy to health.
Unfortunately it is not only the economy, wherever this wretched man and his Government have been involved ,mess and inefficiencies have followed.
If Gordon Brown had an ounce of decency or honour in his fibre he would resign and call an election. Instead he and his henchman are trying everyting they can to save their own skins and party.
- Ian Glen., Durham. England., 23/10/2009 10:44
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I remember Gordon Brown telling us 'No more boom and bust'. He got it completely wrong and should resign now.
- Simon Ellis, London, 23/10/2009 10:35
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All the result of good ole Spendo Gordo. Spend, spend, spend, borrow, borrow, borrow for 12 years, allow 125% mortagages, do nothing to curb bank and consumer excesses and this is the result. After 12 years, what a massive mess Brown and Labour have created. Soon the I.M.F. will need to be called in (just as with Labour in the late 1970s). The difference is that at that time the U.K. was a country, with policies at hand to help it get back on its feet. Now, with the U.K. shortly becoming a province of a bigger country, the central government in Brussels will have control over the economic recovery policies -- and it won't favour any of the provinces over any other. We've already had a taste of that with the E.U.'s grab for power over banking in all provinces; it's clear that London's time as a world financial centre is now almost over.
- Phil Jones, London UK, 23/10/2009 10:27
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The news that we have a continuing recession, which debunked the idea that the UK had returned to growth, is not that surprising. Pundits often see what they wish to see; only this time it was all done with smoke and mirrors.
The simple fact that the financial markets have still been restricting lending, has led to a continued contraction in output; and until this is remedied buy a loosening of the purse strings, there will be more of the same to come.
Unlil more lending filters through to small and medium-sized enterprises, the economy will continue to be embattled.
- Alan Mead, London, UK, 23/10/2009 10:25
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Congrats Gordon, your task of destroying the once Great Britain is coming along nicely. You and your zaNulabour cronies are well worth the much publicised pay rise.
- Ben, Berkshire, 23/10/2009 10:24
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Of course these figures are preliminary figures, the OECD will revise them, as is the usual pattern, as further information becomes available. We are probably out of recession as the continuing bull market shows this morning. If the SE was concerned the market would have taken a dive. All the leading economists expect this figure to be revised. These preliminary figures are not as shocking as you imply.
- Val Daniels, Mijas Costa, Spain, 23/10/2009 10:08
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Just shows what damage Labour and the Tories have done to our economy between them by deregulating the finance sector, selling off our public assets and leaving the markets to let rip. Neither Germany nor France did this and look where they are compared to us.
Unfortunately we are set to elect Cameron who has nothing new to contribute other than cutbacks and more privatisation and deregulation. Don't these politicians learn anything?
- Robert C, London UK, 23/10/2009 10:02
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What do you really expect? we have become a 3rd world nation. No output, strikes, huge levels of poverty and fixated on reality televisions and cheap entertainment...
whoever believs all the glossy smiles, does't ralize that the wall is only being held up by the wallpaper.....
- Joanna Carling, London, 23/10/2009 09:52
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This recession still has a long way to run yet I fear
- Wallytrader, London, 23/10/2009 09:49
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