British economy slides deeper into recession

The British economy dived further into recession with a worse-than-expected 1.9% decline in the first quarter of 2009, official figures showed today.

The contraction followed a 1.6% slump in the last three months of 2008 - the first time two successive quarters have contracted more than 1% since records began in 1948.

Today's estimated fall in quarter-on-quarter output is the largest decrease since 1979, according to the British Office of National Statistics (ONS).

The dire figures come after Chancellor Alistair Darling indicated a 1.6% slump in the quarter by saying the contraction would be similar to the previous period in his Budget speech.

He also predicted the economy would shrink by 3.5% this year - more than double his previous forecast.

Today's figures come amid savage declines in output for many key sectors of the economy.

Much of the contraction was driven by an acceleration in decline for the service sector, which fell 1.2% from a drop of 0.8% the previous quarter.

Services, which account for 75% of the UK's economy, were pushed lower by a significant drop in business services, according to the ONS.

Business services, including accounting and legal services, slumped 1.8%, the largest fall since records began in 1983.