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The figure indicates recession may be near since the country's contraction accelerated. In the three months prior to July, the institute said the gross domestic product shrank by 0.1 percent, the Times of London reported.

The group also predicted a 0.2 percent decline in the GDP from July through the end of September, the Times reported.

"These figures reinforce the belief that the economy will contract in the third quarter and is well on its way into recession", said Howard Archer of Global Insight, a frequently quoted economist.

The sliding economy was also hit by a slowdown in house sales, which fell to a record low in July, when only 17,300 first-time buyers purchased homes in Britain during the month, a 48 percent decline from July 2007, the Times reported.

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