Recession looms as economy shrinks sharply | WHAT REALLY HAPPENED

Recession looms as economy shrinks sharply

The British economy shrank by far more than expected in the third quarter of the year which, barring a miraculous bounce in the current three months, means it is in recession for the first time since the early 1990s.

The news pushed the FTSE 100 index of leading shares down by 9% at one point - one of the biggest falls it has ever suffered. Sterling took a pounding on the foreign exchanges, falling to just $1.54 nearly a quarter below its summer value.

Official data showed gross domestic product contracted by a much-bigger-than-expected 0.5% in the July to September period, the first fall since early 1992 and the biggest drop since the fourth quarter of 1990.

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