UK sinks into double-dip recession The UK economy has slipped back into recession, prompting angry clashes at PMQs. Britain has sunk back into recession, its first double-dip downturn since the 1970s, piling pressure on the government to soften its austerity drive. GDP unexpectedly shrank by 0.2% between January and March, following a 0.3% contraction in the fourth quarter of last year, according to the Office for National Statistics. A technical recession is defined as two or more consecutive quarters of economic decline. The figures wrongfooted City economists, who had expected a return to growth, albeit of a meagre 0.1%. The shock downturn piles further pressure on the government to step up its efforts to boost the economy, and highlights the challenges it faces in reducing Britain's debt from record levels. The fall back into recession will also heighten calls for the chancellor to ease up on his deficit-cutting plans. However, George Osborne stuck to his guns on Wednesday morning. It's taking longer than anyone hoped to recover from the biggest debt crisis of our lifetime. The one thing that would make the situation even worse would be to abandon our credible plan and deliberately add more borrowing and even more debt," said the chancellor. David Cameron admitted at Prime Minister's Questions that the return to recession was "very, very disappointing." "There is no complacency at all in this government in dealing with what is a very tough situation, which frankly has just got tougher," he said. It is very difficult recovering from the deepest recession in living memory, accompanied as it was by a debt crisis. Hitting back, Ed Balls, the Labour shadow chancellor, said: "We consistently warned that their austerity plan was self-defeating and that cutting spending and raising taxes too far and too fast would badly backfire. The UK economy contracted by 7.1% during the 2008-2009 recession, which lasted five quarters in a row. Since then recovery has been slow - the weakest in 100 years, weaker than after the Great Depression, the 1970s oil shock or the recessions of the 1980s and 1990s. The latest decline was caused by falls in industrial and construction output while Britain's dominant service sector barely grew. "The UK has sunk back into a recession, if the official first estimate of economic growth in the first quarter is to be believed," said Chris Williamson, chief economist at Markit. However, the underlying strength of the economy is probably much more robust than this data suggests. The danger is that this gloomy data delivers a fatal blow to the fragile revival of consumer and business confidence seen so far this year, harming the recovery and even sending the country back into a real recession. Britain's service industries, which make up more than three-quarters of the economy, grew by just 0.1% in the first quarter, after declining by 0.1% in the fourth quarter of last year. Growth was held back by a drop in output in the business services and finance sector. Industrial output was 0.4% lower, while construction shrank by 3% - the biggest drop since the start of 2009. The question is whether the Bank of England will respond by pumping more money into the economy under its quantitative easing (QE) programme, but it is hamstrung by high inflation. "The biggest surprise - and perhaps the most worrying element of this report was the disappointment in services output," said Alan Clarke at Scotia bank. Ironically construction, which had the most potential to determine whether or not the UK is in recession, proved much less negative than feared. The Bank [of England] recently highlighted that it cares most about underlying growth. Our gauge of underlying GDP showed zero growth - still very disappointing. The door is back open to more QE, but the elevated inflation outlook is the biggest obstruction. The GDP figures conflict with other recent data from business surveys, which have painted a steadily improving economic picture. Economists also question the reliability of the official construction numbers. The statistics office's chief economist Joe Grice said the bigger picture in Wednesday's GDP data is that the UK economy, in volume terms, was flat between January and March compared with the same period last year. Looking at the UK since last summer, he added that the picture is of "a flattish economy." Britain is the first major economy to report GDP data for the first quarter of 2012.