Economy shows "marked slowdown" as GDP growth drops 0.3%

The Institute estimates that output declined by 0.2% in July alone, in line with its recent forecasts showing that GDP is likely to decline by 0.2% in the third quarter of this year and there is "a risk of a further deterioration".

Recent forecasts from NIESR show that GDP is expected to grow by 1.7% in 2016, slowing to just 1% in 2017.

It added that the chance of a recession has increased 'significantly' since its previous forecast, and that there is now "an evens chance of a ‘technical’ recession in the next 18 months".

James Warren, Research Fellow at NIESR, said: “We estimate that in the three months to July the UK economy grew by 0.3%, a marked economic slowdown. The month on month profile, suggests that the third quarter has got off to a weak start, with output declining in July. Our estimates suggest that there is around an evens chance of a technical recession by the end of 2017.”