The British economy contracted by 0.8 per cent in the last quarter – more than double the figure predicted by analysts.

According to the BBC, these figures increase the annual rate of decline to 5.6 per cent, which represents the biggest fall since when records began in 1955.

The decline has been driven by the crisis in the business services and finances sector, which have been hit particularly hard by the recession.

“With credit still severely restricted, consumers and businesses continuing to retrench and world trade yet to pick up, it is hard to see any grounds for sustained optimism at the moment,” said the senior economic advisor to the Ernst and Young ITEM Club, Hetal Mehta.