GLOBAL FORCES

Britain is the first major developed economy to publish growth data for the last three months of 2008, and now joins the United States, Japan, and the euro zone including Germany in recession.

Britain's economy grew by just 0.7 percent in 2008 as a whole, the weakest annual growth since 1992 and fractionally below the government's forecast for the year.

However, a raft of weak activity data in recent weeks suggests its forecasts for a 0.75-1.25 percent contraction in 2009 may be too optimistic. Some analysts reckon the economy will suffer its worst downturn this year since World War Two.

Unemployment has surged to nearly 2 million, as a sharp fall in demand has forced firms to lay off workers, and the government has stumped up billions of pounds of taxpayers' money to shore up the financial system and encourage banks to lend.

"Today's figures are the final nail in the coffin for Prime Minister Gordon Brown's claim to have 'ended boom and bust'. The United Kingdom economy is most definitely bust at the moment," said Charles Davis, economist at consultancy CEBR.

Brown and finance minister Alistair Darling insisted the unexpectedly sharp downturn was the result of global forces and that the speed of recovery would depend on governments across the world taking coordinated action to boost growth.

"It's undoubtedly sharper than many people believed, partly because you've seen industrial production go down because the export markets have been badly affected," Darling told Sky News, adding Britain would have to live "within its means" in the medium term.