U.K. Economy Still Caught in Recession

LONDON (TheStreet) -- Stocks in London were higher Friday but the pound slumped against the dollar after data revealed the U.K. remains in recession.

Britain's statistics office said the domestic economy shrank 0.4% in the third quarter of the year. Gross domestic product was dragged lower in the third quarter despite recent gains in Britain's dominant services sector. The British economy hasn't recorded growth since April 2008.

Economists expected a slight increase in third-quarter GDP in Britain.

The FTSE in London was up more than 1% as of 5 a.m. EDT. The pound was trading at $1.6440. Earlier this week it hit a six-week high of $1.6694.

Meanwhile, the DAX in Frankfurt rose 1.1% after German business confidence rose for a seventh consecutive month in October as Europe's largest economy showed more signs of a recovery.

-- Reported by Joseph Woelfel in New York .

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