The UK economy shrank by 1.9 per cent in the first three months of this year, official figures have shown.
The data from the Office for National Statistics (ONS) is worse than the 1.5 per cent predicted by analysts and the decline hinted at by Alistair Darling in Wednesday's Budget.
In his announcement the chancellor said GDP would fall by a "similar amount" to the last quarter of 2008, which was 1.6 per cent.
On Friday the ONS, which also revealed a 0.3 per cent rise in retail sales in March, said: "The slowdown was the result of both reduced services and production activity."
A breakdown of the figures shows that manufacturing output was down by 6.2 per cent, while electricity, gas and water supplies were down 1.9 per cent.
On Wednesday Mr Darling predicted a GDP contraction of 3.5 per cent this year before forecasting growth of 1.25 per cent in 2010 and 3.5 per cent the following year.
His forecasts have been dismissed as "fantasy" by opposition parties, while the International Monetary Fund has issued its own predictions ruling out growth next year.
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