The United Kingdom for the first time in 16 years registered a zero economic growth rate in Q2 2008 after enjoying 63 consecutive quarters of growth.

The Government had previously forecast a +0.2% growth rate, while economists had a more modest +0.1% prediction. But the negative effect of the economic slowdown on the country’s construction and manufacturing sectors led the Office of National Statistics (ONS) to revise it to zero.

Construction declined by -1.1% in Q2 2008, worse than previous estimates of +0.7% growth and manufacturing also slipped by -0.8%. With the second quarter data, the Bank of England (BoE) revised its growth forecast to a realistic zero growth for 2009 and even accepted the possibility the UK would have a quarter or two of negative growth.

The bad news led to the decline of the sterling against the dollar and euro.