Gross domestic product (GDP) tumbled by 1.5% in the final quarter of 2008, figures show, putting the UK into an official recession.
The Office for National Statistics' (ONS) quarterly bulletin confirms GDP began shrinking in July 2008 as the crisis in the financial sector spilled into the wider economy.
The 1.5% fall in economic output is the largest quarter-on-quarter decline since 1980, when Britain was in the grip of a deep recession.
Analysts say the trend is likely to continue through 2009 and into 2010, pointing out that the past two UK recessions have lasted for five quarters.
Business services and finance output fell 0.5% in the fourth quarter of 2008 after falling 0.6% in the previous three months, while services industries saw an overall decline of 1%.
Manufacturing was hardest hit, falling 4.6%, compared with 1.6% in the third quarter.
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