The British economy remained suck in recession during the third-quarter, according to data released on Friday. That stood in stark contrast to the euro area, where reports showed steadily improving activity. A significant reason for the divergent performance between the economies appears to be the larger debt burden of British consumers, analysts said.

A preliminary report from the Office of National Statistics in London showed gross domestic product contracted by 0.4 per cent between July and September from the previous three months, and it shrank by 5.2 per cent compared with a year earlier. The British economy has now contracted for six successive quarters, making this the longest downturn since the agency started its data series in 1955.

Economists had expected growth of 0.2 per cent for the quarter, based on recent improvements in housing statistics, purchasing managers’ indexes and the wilting pound, which should make exports more competitive. Rather, the report showed weakness in the service sector, where output fell 0.2 pe recent; industrial production, down 0.7 per cent; and construction, off 1.1 per cent.

Britain is starting to further lag the 16-member euro area, where France and Germany are leading steady improvements in manufacturing, services and consumer demand.

Jean-Michel Six, chief European economist at Standard & Poor’s, cited consumer indebtedness as the main factor undermining a recovery in Britain. “UK consumers are coming out of a period of very significant leveraging, and the process of unwinding that is long and painful,” he said. “You would expect savings rates to grow and credit demand to fall, weighing on the economy.”

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