GDP has now shrunk for six consecutive quarters for the first time since official records began in 1955.

Previously the longest consecutive period of recession came in the late 1970s and early 1980s when GDP shrank by five consecutive quarters.

The figures, released this morning by the Office of National Statistics come as a shock to analysts who had widely predicted a return to growth in the third quarter of the year.

Stock markets have boomed over the past six months and house prices have halted their precipitous decline.

However, the statistics today reveal the frailty of any recovery.

Mark Halstead, Red Flag director at Begbies Traynor, said that the figures were bad news for the UK economy as it meant that spending over the Christmas period will be subdued.

He added: "The economy is grinding to a halt with no available credit for businesses. We need a big bang effect where banks start lending again. It will happen, it is just a question of when."