GDP figures fell by 0.4 per cent in the third quarter, meaning the UK is in the longest recession on record.
GDP has now contracted for six consecutive quarters, the longest run since 1955 when GDP records began, according to the Office for National Statistics. It says GDP fell by 5.2 per cent over the last 12 months.
France, Germany and Japan have all recorded positive GDP figures in recent months and come out of recession. The ONS says its GDP figures are only the first estimate and may be revised.
The news came days after Chancellor Alistair Darling said that the worst of the recession is over.
Royal London Asset Management economist Ian Kernohan says the GDP figures come as a surprise to market expectations, especially given the comments about the end of the recession.
He says: “A further extension to the quantitative easing programme now looks more likely.”
Liberal Democrat Shadow Chancellor Vince Cable says: “For all the hopes of a quick recovery, these figures make it clear we are still in the longest and what could yet become the deepest recession on record.
“For all that has been thrown at the economy to try to stimulate a recovery it is clear that massive structural problems remain, particularly in the banking sector.
This news adds to serious concerns over the realism of Government plans to deal with the burgeoning public debt. It is critical ministers spell out a credible path as to how they will deal with the deficit. With the legacy of unemployment likely to remain for years after the end of the recession, we need radical measures to avoid repeating the mistakes of the 1990s which left millions on the scrapheap.”