The UK has slumped into a double dip recession for the first time since 1975 after the GDP fell by 0.2 per cent for the first quarter of 2012. Economists predicted that the GDP would grow by 0.1 per cent which didn’t match the figures released by the ONS.

The UK’s GDP has to shrink for two consecutive months for the country to be classed as in recession which has now occurred. The GDP figure for the preceeding quarter at the end of 2011 indicated a drop of 0.3%.

After the new figures were announced the opposition leader Ed Miliband said the double-dip was proof the Government’s austerity plan had failed. The 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.’ ‘But over many years this country built up massive debts, which we are having to pay off.’

The Prime Minister said the figure was “very, very disappointing” but added that that it would be “absolute folly” to change course and jeopardise Britain’s low borrowing rates.

“The one thing we mustn’t do is abandon spending and deficit reduction plans, because the solution to a debt crisis cannot be more debt.”