Hong Kong’s economy is on the brink of recession as a crackdown on pro-democracy protests drives shoppers and tourists away, crush demand for the territory's companies and push investors to do business elsewhere.

Equities on the city's stock exchange fell another 1.1pc on Friday as its political crisis deepened. Warnings that face masks could be punished with fines and up to a year in jail were met with renewed gatherings of activists, amid outrage over the shooting of a protestor earlier this week.

Meanwhile bleak figures suggest the Hong Kong economy contracted in the three months to September.

This would follow a decline in the previous quarter, meaning Hong Kong will have entered a technical recession.

Business activity is tumbling at close to the fastest pace recorded since the financial crisis, according to IHS Markit.

Its purchasing managers index, a private sector survey, came in at 41.5 for September, up a touch from 40.8 in August but still far below the 50-level that divides growth from contraction.

The readings for output and new orders are languishing at even lower levels, while expectations for the future are at their weakest since the survey began measuring them in 2012.

Bernard Aw, of IHS Markit, said: “Anecdotal evidence suggest that tourism and retail sectors were particularly badly affected by political protests in the territory.