LONDON – Britain's economy will shrink in the third quarter for the first time in 15 years, a leading business group warned Tuesday.

The British Chambers of Commerce's quarterly survey of 5,000 businesses found that confidence plummeted in both the manufacturing and services sectors during the third quarter, and predicted that unemployment would rise next year. The group did not offer a prediction for the increase in the rate of unemployment.

The survey's results are yet more evidence – amid a crashing housing market, falling consumer confidence and inflation running at double government targets – that Britain will suffer negative GDP growth in the third quarter of the year. British economic growth ground to a halt in the second quarter, ending more than 15 years of continuous expansion.

“The very weak BCC survey reinforces fears that the U.K. is headed for an extended and deep recession,” said Howard Archer, chief British economist at Global Insight.

The Bank of England is widely expected to cut interest rates by half a percent on Thursday to stimulate the economy.