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Construction contracts by 2.4 pc as recession worse than feared

The UK economy has plunged further into recession than expected, with a 1.9 per cent contraction in the first quarter of the year.

The figure from the Office of National Statistics, which followed a slump of 1.6 per cent in the final three months of 2008, today revealed the true extent of the damage to the economy. It was the first time two successive quarters had contracted more than 1 per cent since records began in 1948.

The new data come just days after chancellor Alistair Darling indicated there would only be a 1.6 per cent slump in the quarter by saying in his Budget speech the decline would be similar to the previous period.

Construction also experienced a continued fall in activity.

The sector is estimated to have contracted by 2.4 per cent for the first three months of the year, following a decrease of 4.9 per cent in the previous quarter.

Mr Darling has predicted the economy could shrink by 3.5 per cent this year - more than double his previous forecast.