The UK economy remained stuck in recession last month, according to a respected economics thinktank, further denting hopes for a strong bounce-back after the downturn.

The economy shrank by 0.4 per cent in the three months to the end of October, an unchanged rate of contraction from the third quarter, the National Institute of Economic and Social Research estimated on Thursday. The projection of continued weakness came after official figures showed that industrial production in September had picked up after factory stoppages caused a sharp fall in output during the summer, but there were no signs yet of a sustained upturn.