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Figures show UK still in recession

  • Story Highlights
  • GDP decreased 0.4 percent in the third quarter
  • Some analysts had expected figures to show UK recession was over
  • Statistics showed biggest declines occurred in hotel, restaurant industries
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LONDON, England (CNN) -- Britain's gross domestic product suffered another decline in the third quarter of 2009, figures showed Friday, meaning the country remains mired in recession.

GDP decreased 0.4 percent in the third quarter, according to preliminary estimates from Britain's Office of National Statistics.

Some analysts had expected Friday's GDP figures to show a slight rise, indicating an end to the recession.

The British economy officially entered recession in January after two consecutive quarters of negative GDP growth, which is the traditional definition of a recession.

For the third quarter of 2009, statistics showed the biggest declines occurred in the hotel and restaurant industry, which fell by 1 percent; construction, which decreased by 1.1 percent; and agriculture, forestry and fishing, which declined by 1.6 percent.

There was zero growth in government and other services -- an improvement from the previous quarter which saw a decline of 0.2 percent. The government said the health industry made the largest contribution to that change.

"The fact that the economy is still contracting despite the huge amount of policy stimulus supports our view that the recovery will be a long, slow process," said Vicky Redwood, an economist at Capital Economics in London.

"The economy now looks unlikely to grow by more than one percent at best next year. Similarly, with a huge amount of slack still building, we continue to think that deflation is a key risk."

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