The National Institute of Economic and Social Research (NIESR) has estimated that the UK economy shrank by 1.5% in the quarter from October to December 2008 which, if it proves to be accurate when official figures are released in two weeks, will be its worst performance since 1980.
The largest recorded quarterly decline was 2.6% in 1958.
The UK will formally be in recession if the figures released by the Office for National Statistics confirm that the fourth quarter of 2008 did indeed show a decline in GDP continuing from the third quarter which has been confirmed at minus 0.6%.
NIESR also warns that the economic downturn is increasing in pace and that Alistair Darling’s prediction that the economy would shrink by 1% this year was "overly optimistic".
Meanwhile, the number of people out of work in the UK rose by 137,000 to 1.86 million in the three months to October - the highest level for 11 years.
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3 September 2010