MercoPress. South Atlantic News Agency

UK first quarter contraction rate was fastest in 50 years

The 2.4% fall was the fastest since 1958 with an annual decline fo 4.9%

The recession-blighted United Kingdom economy shrank at its fastest rate for more than 50 years in the first three months of 2009, official figures have shown. And revisions to figures revealed the current recession began earlier than first thought, with a 0.1% decline seen between April and June last year compared with previous estimates of zero growth.

Output fell 2.4% in the first three months of the year - the fastest rate since 1958, said the Office for National Statistics (ONS). The economy also showed an annual decline of 4.9% - the biggest fall since ONS records began in 1948.

The first-quarter decline of 2.4% is much worse than the 1.9% first estimated and comes after bigger-than-expected falls in construction and the UK's key services sector.

The plummet in activity between January and March was almost equal to the 2.5% fall suffered during the whole of the recession in the 1990s, said Investec's David Page.

He warned: “The economy is now likely to undergo a peak to trough adjustment in excess of 5%, nearly as big as the overall 5.9% collapse seen from 1979-1981.”

The scale of the decline could put pressure on Chancellor Alistair Darling's forecasts for the public finances this year. But Chief Secretary to the Treasury Liam Byrne, said the figures were “historic”, reflecting the state of the economy months earlier. “They don't change the judgment made by the chancellor in the budget that growth will return at the end of the year,” he added.

Shadow Chancellor George Osborne said: “We hope the recovery comes as soon as possible but sadly we now know this recession has been longer and deeper than we had thought.”

Liberal Democrat Treasury spokesman Vince Cable warned: “Such a dramatic collapse in growth can only make the public finances worse. Rather than making promises on public spending that nobody believes, the Government must start taking tough choices on whether it is going to cut spending or raise taxes to bring the economy out of the red.”