UK economy shrinks much more than expected in Q2

Britain's economy shrank more than twice as fast as expected in the second quarter to register its biggest annual decline since comparable records began in 1955, official data showed on Friday.

The Office for National Statistics said GDP fell by 0.8 percent on the quarter, taking the annual decline to 5.6 percent. Analysts had forecast a quarterly decline of just 0.3 percent after a hefty 2.4 percent drop in the first quarter.

The figures suggest that recovery could take longer than expected and may boost expectations that the Bank of England could yet add more stimulus to the economy, having already cut interest rates to a record low and embarked on a 125 billion pound quantitative easing programme.

The economy has now shrunk for five consecutive quarters with a cumulative decline of 5.7 percent. That is more than double the drop seen in the recession of the early 1990s and not far off the 6.4 percent contraction experienced in the recession of the early 1980s.

A breakdown of the figures showed business services and finances, a sector that has boomed for much of the last decade, accounted for more than a quarter of the GDP decline in the second quarter.

Overall, services fell by 0.6 percent on the quarter and by 3.8 percent on the year.