The UK economy slumped in the third quarter amid the global financial crisis, becoming the latest developed nation to experience an economic contraction.

The Office for National Statistics said today that the economy contracted a far-bigger-than-expected 0.5% in the third quarter, compared with zero growth in the second quarter. It is the first time the economy has contracted since the second quarter of 1992 and the biggest drop since the fourth quarter of 1990.

The economy grew 0.3% in the third quarter from a year earlier, compared with annual growth of 1.5% in the second quarter. It is the weakest annual growth rate in 16 years.

Economists had forecast the U.K. economy would shrink 0.2% on a quarterly basis and rise 0.5% on a year-to-year basis.

IE