Britain’s economy shrank by -0.5% in Q3 2008 compared to the previous quarter, which was its fastest rate since 1990 as household spending fell by its biggest amount in more than a decade, according to The Office for National Statistics (ONS).

This leaves the annual rate of growth at 0.3%, the weakest since 1992. The figures showed the consumer sector and manufacturing suffered more than previously thought and that Government spending was just about the only thing supporting the economy in the third quarter.

The data reinforced concerns that Britain is sliding into a deep recession and raised expectations the Bank of England will follow last month’s 1.5% cut in borrowing costs with another sharp reduction this week