Britain, Europe's third-largest economy, is suffering from a deeper recession than earlier anticipated, the latest data released by the Office for National Statistics (ONS) yesterday revealed.

In its preliminary GDP estimate, ONS reported a 0.7-per cent contraction for the UK economy in the second quarter compared with the first quarter, much lower than the 0.2 per cent forecast by economists. The GDP shrank by 0.8 per cent in Q2 compared to a year ago quarter.

This is the third quarter in succession when the nation's GDP plunged, pushing the UK into the ''longest double-dip recession since the second world war.'' In the first quarter of 2012 the GDP contracted 0.3 per cent and in the December quarter also it declined 0.3 per cent.

Technically, two successive quarterly contractions represent recession.

As the figures are only ONS's first estimates, they could be later revised up or down.

ONS cited change in bank holidays in May and June due to the Queen's diamond jubilee celebrations and the wettest weather in over a century during April to June as additional factors that affected the GDP estimate for the June quarter.

Chancellor of the exchequer George Osborne puts the blame for poor growth on the previous Labour government and the debt build up over time, and the impact of the deepening eurozone credit crisis.

"We all know the country has deep-rooted economic problems and these disappointing figures confirm that," Osborne said.

Opposition Labour party considers the government's deficit reduction strategy has driven the British economy to the continuing recession.

The International Monetary Fund (IMF) last week said fiscal tightening has caused the country's output to reduce by 2.5 per cent.
 
It is believed that the dismal GDP figures would increase the pressure on the government to review its stringent austerity measures, although no policy changes are anticipated.

The GDP growth figures indicate that all the major sectors underperformed during the second quarter. Construction output was down by 5.2 per cent in Q2 compared with Q1 and output of the production industries decreased by 1.3 per cent. Output of services industries shrank by 0.1 per cent during the quarter.

According to some analysts, the UK economy is now 4.5 per cent smaller than it was before the global financial crisis, and since the Conservative-led coalition government took over in 2010, the economy has remained flat or even 0.3 per cent smaller than it was then.

Last week the International Monetary Fund (IMF) slashed its growth forecast for the UK economy to 0.2 per cent from the earlier 0.8 per cent. It also downgraded next year's growth prediction to 1.4 per cent from 2 per cent.

The British economy which started to recover in the fourth quarter of 2009 following the global financial crisis has reported five quarterly declines in the last seven quarters, the latest being the sharpest one.

Nevertheless, other economic indicators point to a slightly improved scenario. Surveys indicate that recent business sentiment is upbeat and the job data look healthier. The unemployment rate for March to May eased to 8.1 per cent from 8.3 per cent in the previous quarter.

Osborne said that over the last two years, the deficit was cut by 25 per cent and businesses have created over 800,000 new jobs.

There have been calls for Bank of England to increase quantitative easing from the current level of £325 billion to stimulate economic growth. In last month's monetary policy committee's meeting, the move was just short of the majority to pass through, as four members voted in favour against the required five.