Depth of UK’s double-dip recession laid bare as figures show economy declined faster than initially thought

THE double-dip recession is deeper than originally feared as revised figures today showed a sharper decline in the economy in the final quarter of last year.

• Gross domestic product (GDP) shrank by 0.4% between October and December, compared with a previous estimate of 0.3%,

• Economy shrank by an unchanged 0.3% in the first quarter of this year

The Office for National Statistics (ONS) figures mean the current recession - defined as two or more quarters of declining GDP in a row - is more severe than first thought.

The impact of the weak economy was underlined by household spending figures, which showed expenditure falling by 0.1% compared with a previous estimate of 0.1% growth.

Government spending is also growing at its fastest rate in nearly seven years between January and March, the ONS said.

The 1.9% surge in Government expenditure was driven by higher spending on public administration, health and defence.

Household expenditure also declined in the first quarter, driven by a fall in spending on financial services and social protection.

The decreases were partially offset by spending on food and drink and recreation and culture.

The construction sector declined by a larger than previously estimated 4.9%, its worst performance since the first quarter of 2009.

Industrial production sector output, which includes manufacturing, was also revised downwards to a fall of 0.5% from a 0.4% decline.

Despite the overall decline in GDP, growth in the powerhouse service sector, which makes up 75% of the economy, was revised upwards from 0.1% to 0.2% in the first quarter.

Economists and business leaders have warned that a technical recession will hit confidence and could cause businesses to rein in spending at a time when they are being encouraged to invest to stimulate growth.

But the current downturn is expected to be nothing like as severe as the previous recession of 2008/09, which spanned more than a year.