UK financial woes continue

LONDON – The British economy shrank 0.4 percent in the third quarter, surprising forecasters and dashing hopes the country would follow France and Germany out of recession.

The disappointing figure leaves Britain in the grip of the worst downturn since official records began in 1955 and piles pressure on Prime Minister Gordon Brown’s government ahead of next year’s general election.

The persistent decline comes despite concerted attempts by the government and Bank of England to boost the economy, including holding interest rates at a record low of 0.5 percent since March, an unprecedented $290 billion injection into the money supply and billions more through fiscal measures.

The FTSE closed 0.7 percent higher despite the disappointing GDP reading. Meanwhile, in other European trading, Germany’s DAX ended 0.4 percent lower, while the CAC-40 in France was down 0.3 percent.