UK economy has contracted by 1% in three months, research claims

The UK economy contracted by 1% in the three months to the end of November, according to the National Institute of Economic and Social Research (NIESR).

If the figures are supported by the ONS in its official data, released in January, it will serve as official confirmation that the UK is in recession.

While the contraction comes as little surprise, the depth of the fall will alarm many.

Following an official contraction of 0.8%, the figures suggest that the economic contraction is gathering pace.

NIESR said that the immediate threat to the UK economy is the availability of credit and said that further interest rate cuts would have little effect.