The British economy has shrunk for the first time since late 2012, after official data Friday showed second-quarter gross domestic product (GDP) contracted by 0.2%.

A consensus of analyst forecasts had predicted the economy would flatline during the period.

In reaction, the pound dipped below $1.21 versus the dollar but soon recovered ground. Against the euro, the pound also fell. The FTSE 100, which often reacts inversely to the fortunes of the pound, rose after the results but was still in negative territory on Friday morning.

Manufacturing was the biggest contributor to the overall contraction, slipping 2.3% quarter-on-quarter in the three months to June. That figure was the biggest quarterly fall since the first three months of 2009.