The double-dip recession is deeper than originally feared as revised figures show a sharper decline in the economy in the first three months of 2012.
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The Office for National Statistics estimate of gross domestic product (GDP) was revised down from 0.2 per cent because output in the construction industry fell more than was originally thought. Construction output dropped 4.8 per cent, down from the first estimate's drop of 3 per cent, the steepest decline in 11 years.
James Knightley, economist at ING, said the high levels of government spending called the Chancellor George Osborne's austerity measures into question, while Vicky Redwood, chief UK economist at Capital Economics said: "Of course, the GDP figures could yet be revised back up again in the future. But with so many factors holding back the recovery, we still expect the economy to contract by about 0.5 per cent this year as a whole."
The second estimate, which may be revised later, means the UK is in a technical recession, defined as two quarters of decline in a row, following a 0.2 per cent fall in the final three months of 2011.
Revising down the original figure is even more surprising for some economists who were predicting a small rise in GDP in the first quarter of this year. In February, the business organisation the CBI also said it thought the UK would avoid recession.
Shadow Chancellor Ed Balls said the figures show the government must change course and take action to promote growth: "What more evidence can David Cameron and George Osborne need that their policies have failed and that they now need a change of course and a plan B for growth and jobs?" he said.
"It's now clear that this is a recession made in Downing Street by this government's failed policies. "Despite all the problems in the euro area, France, Germany and the eurozone as a whole have so far avoided recession and only exports to other countries stopped us going into recession a year ago.
"The result is that Britain is now in a weaker position if things get worse in the eurozone in the coming months."
Channel 4 News Economics Editor Faisal Islam tweets: "June 2010 deficit reduction plan presumed growth of 4.3 per cent* over past 7 quarters that the government's been in power. We've had 0.3 per cent. * That includes 0.7 per cent which is the 2012 forecast of 2.8 per cent / quarter. OR, in 6 quarters since spending review economy was presumed to grow by 3.7 per cent by June '10 according to the coalition deficit reduction plan. Actually: -0.3 per cent."
Treasury Minister Chloe Smith said the government would not be deflected from its deficit reduction strategy, despite the worsening economic position.
"We need to stick to our path. It would not be acceptable to fail to deal with our debts," she told BBC News.
She said a first line of defence for the economy would be for the Bank of England either to print more money or to reduce interest rates even further.
"Monetary easing would be for the Bank of England to consider, that would be one of our first lines of defence."