Britain's economy shrank by 0.3% in August, hit by weakness in manufacturing and maintenance work in North Sea oil and gas fields, according to official data which underscored the challenge for Prime Minister Liz Truss to speed up growth.
Gross domestic product growth in July was revised down to 0.1% from a previous estimate of 0.2% and the economy was now believed to be back at its size just before the coronavirus pandemic struck, having previously been estimated at 1.1% above it, the Office for National Statistics said.
A Reuters poll of economists had pointed to zero growth.
"The economy shrank in August with both production and services falling back, and with a small downward revision to July's growth the economy contracted in the last three months as a whole," ONS Chief Economist Grant Fitzner said.
In the three months to August, GDP was down 0.3%.
Mr. Fitzner highlighted a "notable decrease" in the manufacturing sector and a greater level than usual of maintenance in the North Sea oil and gas sector which slowed output.
"Many other consumer-facing services struggled with retail, hairdressers and hotels all faring relatively poorly," he said.
Britain's economy looks set to slow sharply as surging inflation hits households and forces the Bank of England to raise interest rates quickly.
Ms. Truss and finance minister Kwasi Kwarteng promise to speed up economic growth but their plan for unfunded tax cuts has sent financial markets into turmoil and has raised expectations for how quickly the BoE will push up borrowing costs.