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UK economy grows- but gloomy financial forecast for winter

UK "likely to slip into recession at the beginning of next year"

The Office for National Statistics has announced that the UK economy grew slightly faster than expected in the third quarter- but the performance was not strong enough to avert a recession in early 2012, economists said.

While growth for July to September was revised up to 0.6 per cent from a previous estimate of 0.5 per cent, the ONS said, the second quarter was revised down from 0.1 per cent growth to show no expansion at all.

Economists predicted the year to end with barely any growth- or possibly, with a contraction- and predicted a winter recession.

"Business survey data has deteriorated, particularly on the manufacturing side, and as things stand there is a good chance that the economy will contract," said Andrew Goodwin, senior economic adviser to the Ernst & Young Item Club.

"Beyond that, much depends on what happens in the eurozone, but unless a more credible and permanent solution appears soon, the UK is likely to slip into recession at the beginning of next year," he added.

The news coincides with the release of separate statistics, also by the ONS, showing the UK's current account deficit to be the widest in 56 years, since records began.