The NIESR Estimate of Gross Domestic Product sank further into negative territory, showing the UK economy contracted -0.2% in the three months to August. The think tank also revised down its estimate for the three months to July to -0.1%. The reading suggests that the UK will descend into recession for the first time since 1991 by the end of this year. The Bank of England is expected to step in with rate cuts by the fourth quarter of this year and continue lowering borrowing costs until rates reach 4.00% (100 basis points below current levels) in the third quarter of 2009.
For a complete listing of this week’s data releses, please see the DailyFX Economic Calendar.