The ONS reported yesterday that Britain was in a recession after figures revealed the economy had shrunk by 0.2 per cent.

The reason for the fall was put down to a decrease in output in the production and construction industry. Production output decreased by 0.4 per cent while construction decreased by 3.0 per cent.

Rupert Watson, head of asset allocation at Skandia, said: “The GDP report is not consistent with most of the other data that has been released, which suggests the UK grew modestly at the start of this year.

“The UK’s GDP reports are subject to significant revision, often a long time after the fact. When there is a difference between the early GDP reports and the business surveys, the business surveys usually turn out to be more accurate.”

Azad Zangana, European economists at Schroders, said: “Commentators will be quick to question these numbers, and in particular the construction data. However, the final published numbers from the ONS on construction are much more reasonable than had been feared by economists and so the real disappointment is the service sector.

“There is room for revisions to these numbers given they are early estimates, although we doubt they will be large enough to make the double-dip go away.”

Paul Mumford, senior investment manager at Cavendish Asset Management, said: “While hardly good news, I very much doubt the slight contraction revealed heralds a double dip in any real, meaningful sense.

“Although there is certainly lingering weakness in certain consumer areas there are promising signs elsewhere. Whilst complacency must be avoided, so must the tendency to scare easily.”