Figures released at the weekend revealed the economy shrank much faster than expected in the December quarter, slowing at the fastest pace since 1980 as the global financial crisis crippled the banking industry.
Gross domestic product fell 1.5 per cent from the previous quarter. Economists had predicted a 1.2 per cent drop. The economy has now shrunk in two quarters, the conventional definition of a recession. The US, Japan, most of continental Europe, parts of Asia and possibly Australia are expected to join Britain in recession this year.
The pound dropped to a new 23-year low against the US dollar. British stocks, particularly the bombed-out banks, fell after the GDP report late on Friday.
Prime Minister Gordon Brown said that the Government was using "every weapon at our disposal" to fight the crisis.
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