The British economy fell back into contraction in the fourth quarter, following a short-lived recovery in the third quarter, and is on the verge of a triple-dip recession, first estimates released by the Office for National Statistics showed Friday.

Gross domestic product declined 0.3 percent sequentially in the fourth quarter, reversing the 0.9 percent growth recorded in the third quarter, which was driven mainly by increased activity during the Olympics. Economists were looking for a more modest decline of 0.1 percent in the final three months of 2012.

Compared to the fourth quarter of 2011, GDP stayed unchanged, as it did in the third quarter. Economists were looking for a 0.2 percent increase. In the whole of 2012, GDP is estimated to have been flat, the agency said.

The British economy has been under pressure from the government's austerity program and above-target inflation that outpaced wage-growth.

At its latest meeting, policymakers at the Bank of England decided to maintain quantitative easing unchanged at GBP375 billion, and to keep the policy interest rate at a record low of 0.5 percent, as they saw that further easing was unlikely to provide much stimulus to the economy.

Inflation in the U.K. remained stable at 2.7 percent in December, adding to the central bank's concerns about a fragile economy. Core inflation slowed to 2.4 percent from 2.6 percent a month ago.

RTTNews