Economists say British recession has begun

LONDON, Oct. 24 (UPI) -- The British economy posted a gross national product decline in July-September, falling 0.5 percent and indicating it was officially falling into a recession.

It was the sharpest quarterly decline in the British economy since 1990, the Financial Times reported.

Although commonly defined as two consecutive quarters of contractions, economists declared the British economy is in recession due to the size of the contraction.

"The depth of the decline means that we are there to all intents and purposes," said Howard Archer at Global Insight, a frequently quoted economist.

Bank of England Gov. Mervyn King warned earlier this week a recession was likely. Nevill Hill at Credit Suisse also said the shrinking economic output "is clear evidence that the economy is in recession."

"The weakness was broad based -- the only sectors seeing a rise in output ... were government services and agriculture," he said.

In the third quarter, the British service sector fell 0.4 percent and output in the construction sector contracted 0.8 percent. Business services and finance fell 0.4 percent, the Times reported.

September also marked a 0.5 percent rise in unemployment, which rose to 5.7 percent in the month in Britain.