Fears that the UK has fallen into recession have been heightened after official figures were revised to show that the economy shrank slightly in the July to September period.

The assessment that gross domestic product (GDP) fell by 0.1% in the third quarter – down from the previous estimate of no growth – will be a blow to Rishi Sunak, who has promised to get the economy growing as one of his fives pledges to voters before an expected general election next year.

The Office for National Statistics (ONS) said a poorer than previously assessed performance by small companies, film production, engineering and design and telecommunication and the IT sector accounted for much of the revision.

GDP for the second quarter was also revised down to zero growth, from a previous estimate of 0.2% expansion, to leave the economy broadly flat over the year.

An economy is considered to be in a technical recession after two consecutive quarters of contraction in GDP, and a further contraction in the fourth quarter would push the UK into that category.

The chancellor, Jeremy Hunt, said he believed the economy was poised to rebound: “The medium-term outlook for the UK economy is far more optimistic than these numbers suggest.

“We’ve seen inflation fall again this week, and the OBR [Office for Budget Responsibility] expects the measures in the autumn statement, including the largest business tax cut in modern British history and tax cuts for 29 million working people, will deliver the largest boost to potential growth on record.”

His Labour counterpart, Rachel Reeves, dismissed Hunt’s analysis, saying the latest figures were an example of Sunak’s record of failure as prime minister. “He failed to beat Liz Truss, he failed to cut waiting lists, he failed to stop the boats and now he has failed to grow the economy,” the shadow chancellor said.

“Thirteen years of economic failure under the Conservatives have left working people worse off, with higher bills, higher mortgages and higher prices in the shops.”

City analysts were agreed that an already weak performance by the UK economy this year had been found to be weaker than previously thought, despite a larger rise in consumer spending than earlier estimates showed.

They also expect Bank of England’s 14 interest rate rises over the last two years, taking the cost of borrowing from 0.1% to 5.25%, to have taken a bigger toll on the corporate sector and household spending than previously thought.

Some sectors that suffered in the third quarter in part because of strike action, such as film production, may turn around in the fourth quarter, but the chancellor is likely to be concerned that delays or cancellations of big infrastructure projects such as HS2 have hit the engineering sector.

A reduction in IT spending by the private sector compared with previous estimates is also a worrying trend when companies need to invest in technology to improve the UK’s sluggish productivity.

Separate figures for retail sales volumes in November provided a lift, beating City forecasts of a 1.3% fall to register a modest 0.1% increase year on year after a 0.3% increase since October. Black Friday sales proved to be better than City forecasts, and discounting on furniture, carpets and other household items drew shoppers back to the high street.

However, the retail analyst Nick Bubb said he remained sceptical that the ONS had a strong grasp of trends in retail spending, which other surveys showed remained weak going into the festive period.

The weaker GDP data came the day after Hunt told the Financial Times: “If we stick to the course we’re on, we’re able to bring down inflation, the Bank of England might decide they can start to reduce interest rates” next year.

Martin Beck, the chief economic adviser to the EY Item Club, said GDP was dealt a big blow after an estimate of business investment in the third quarter was cut to 3.2% from 4.2%.

He said the downturn was likely to influence the central bank and force it to cut rates early next year. “The Bank of England [is likely to] retreat from its hawkish rhetoric, meaning interest rates could be cut earlier and more significantly than many had been anticipating.”

With a reduction in interest rates next year expected to boost consumer spending, the economy could rebound in 2024. “So, a worse-than-expected performance this year should be balanced by a better outlook for 2024 and 2025,” he said.

Anxiety among households earlier this year about the economy’s prospects was shown by a rise in the savings ratio, which increased to 10.1% in the third quarter, up from 9.5% in the second quarter as incomes grew by more than expenditure.

Darren Morgan, an ONS director of economic statistics, said small businesses filing lower than expected VAT returns had played a part in forcing the ONS to revise its figures.