The UK has slumped back into recession, official figures from the Office of National Statistics (ONS) show.
The decline, which is likely to last well into the summer, represents the first double-dip recession since 1975.
According to the ONS figures, the economy shrank 0.2% in the first quarter of the year.
With consumer confidence already in need of a boost, the UK’s return to recession will come as a blow to many retailers the British Retail Consortium (BRC) said.
With inflation growing at almost three times the rate of average wage increases, and personal budgets under pressure from high fuel and utility bills, consumers are already cutting back on many areas of spending.
“2012 looks like being tougher than we thought,” BRC director general Stephen Robertson, said.
“If it’s to rekindle recovery the government must deliver a credible growth strategy,” he added. “It should halt its tsunami of destructive new regulations and taxes.”