The double-dip recession is deeper than originally feared as revised figures today showed a sharper decline in the economy in the first three months of the year.

Gross domestic product (GDP) shrank by 0.3% between January and March, the Office for National Statistics (ONS) said, down from a first estimate of 0.2%.

The change was driven by a worse-than-previously estimated performance from the nation's builders, as construction output fell 4.8%, down from a drop of 3%, the steepest decline in 11 years.

The second estimate, which could be revised later, means the UK is in a technical recession - defined as two quarters of decline in a row - following a 0.2% fall in the final three months of 2011.

The downward revision will heap more pressure on the Government and fuel criticism that Chancellor George Osborne's austerity measures are choking off the recovery.

It will also dash hopes that the figures could be revised upwards, possibly into positive territory, after some economists cast doubt on their accuracy.

The second estimate provides data for the expenditure side of the economy for the first time and revealed a slowdown in household spending, which increased by 0.1% in the first quarter, compared to 0.4% growth in the final quarter of last year.

Household spending declined for three quarters in a row last year and has been hit by high inflation, sluggish wage growth and soaring unemployment.

But Government spending surged 1.6%, the biggest rise since the first quarter of 2008, driven by spending on health and defence.

The services sector, which accounts for some three-quarters of the economy, saw unrevised growth of 0.1%, after a decline of 0.1% between October and December last year.

The industrial production sector declined at an unrevised 0.4%, with manufacturing flat after a 0.7% decline in the previous quarter.

Economists and business leaders have warned that a technical recession will hit confidence and could cause businesses to rein in spending at a time when they are being encouraged to invest to stimulate growth.

But the current downturn is expected to be nothing like as severe as the previous recession of 2008/09, which spanned more than a year.

In another set of data, business investment rose by £1.1 billion, or 4%, to £30.8 billion when compared to the previous quarter.

The rise was driven by investment in electricity, gas and water, and mining and quarrying industries, the ONS said.

James Knightley, economist at ING, said the high levels of Government spending called the Chancellor's austerity measures into question, while Vicky Redwood, chief UK economist at Capital Economics, said Government support would not last.

She said: "Of course, the GDP figures could yet be revised back up again in the future.

"But with so many factors holding back the recovery, we still expect the economy to contract by about 0.5% this year as a whole."

Downing Street said that with much of the rest of Europe in recession, it was always going to be difficult for the UK economy to grow.

The Prime Minister's official spokesman pointed out that while exports of goods to non-EU countries had grown by 4.4% over the period, exports to the EU had fallen by 3.1%.

"What the figure confirms is that it is a very difficult economic situation and we will take time to recover from the biggest financial and debt crisis in our lifetimes," the spokesman said.

"We have always made clear - and the Chancellor said in his autumn statement - that if the rest of Europe doesn't grow it would prove hard to avoid a recession here in the UK.

"We cannot be immune from what is happening on our doorstep."

The Independent