Monthly GDP also fell 0.1% in October, with services and construction both down. Expectations had been for 0.1% growth following a 0.1% fall in September.

The weaker-than-expected figures may strengthen the case for the Bank of England to cut interest rates at its meeting next week.

Commenting on the latest figures Trade Nation senior market analyst David Morrison said:  “Yet another disappointing economic number for the UK, and one which now puts investors on recession watch. Sterling fall sharply on the news, before recovering around half of its losses. The poor data strengthens the probability of a rate cut from the Bank of England next week, even as high inflation remains a concern.”

Wealth Club head of investment research Jonathan Moyes commented: “The government and the Chancellor spent much of their time sapping what little confidence the UK economy had left in October. So, it is not unsurprising to see the economy not only stagnate, but contract in the month before the Budget.”

He added: “Confidence is a key ingredient for a thriving economy, it is a shame to see it given away so freely to mask political choices. For comparison, US GDP growth in Q3 is expected to come in at a blistering 3.8%. The UK is firmly in the global slow lane.”