Statistics show that growth fell 0.2 per cent in the first three months of the year, marking the second successive quarterly drop for Britain’s economy.
GDP fell 0.3 per cent in the last three months of 2011.
The figures are a blow for City bosses, who had predicted the economy would grow 0.1 per cent.
Chancellor George Osborne said: “It’s a very tough economic situation. It’s taking longer than anyone hoped to recover from the biggest debt crisis of our lifetime – even after the recent fall in unemployment.”
However, he appeared to bat the blame into Labour’s court, adding: “Over many years this country built up massive debts, which we are having to pay off.”
Some economists have presented a more positive outlook, suggesting that the reality is not as bad as the figures.
Chief economist at Markit Chris Williamson told The Sun newspaper: “The underlying strength of the economy is probably much more robust than these data suggest.
“The danger is that these gloomy data deliver a fatal blow to the fragile revival of consumer and business confidence seen so far this year, harming the recovery and even sending the country back into a real recession.”
And senior economic advisor to the Ernst & Young ITEM Club, Andrew Goodwin, told the Telegraph: “Our reaction to these figures is one of disbelief. The divergence between the stronger survey data and dire official output estimates is virtually unprecedented and must raise significant question marks over the quality of the data.”
Office for National Statistics chief economist Joe Grice countered: “We have no reason to suspect that these figures are any less reliable than usual.”
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