Quarterly outcome was nevertheless slightly ahead of analysts' expectations for a modest decline in output
The central bank warned that borrowing costs will likely stay elevated for some time
Nevertheless, Bank of England not expected to raise interest rates at next policy meeting
The U.K. central bank kept its interest rate unchanged at a 15-year high of 5.25%
Consumer prices index moderated to 6.7% in the year August, down from 6.8% in July
Annual rate falls to 6.8% largely driven by lower energy prices, according to Office for National Statistics
Quarter-percentage point increase, to 5.25%, was the central bank's 14th hike in a row
Fuel prices were the biggest driver behind the drop
Central bank says British households face higher debt burdens but banks are in better position to help than they were 15 years ago
Expectations of higher borrowing rates are having a knock-on effect across lending markets