BRITAIN'S longest double-dip recession for more than 50 years is expected to be confirmed in official growth figures today as eurozone woes continue with a growing belief that Spain is facing a full sovereign bail-out.
This morning, the Office for National Statistics is due to announce that for the third quarter running the UK's economy has shrunk. Analysts forecast a contraction for this year's second quarter of 0.2%.
This would mark the longest double-dip recession since quarterly records began in 1955 and it is believed to be the worst since the Second World War.
The latest decline is set to have been worsened by the extra bank holiday surrounding the Queen's Diamond Jubilee and record rainfall in April and June.
The economy entered a technical recession in the first quarter of the year with GDP declining 0.3%, following a 0.4% drop in the final quarter of 2011.
This was on the back of five quarters in a row of falls in 2008 and 2009 from which the economy has not fully recovered.
Earlier this month, Prime Minister David Cameron did little to raise hopes of recovery when he suggested that the austerity programme, already likely to last until 2017, will, in fact, continue for the rest of the decade.
Economist Philip Shaw, who predicts a 0.4% fall in gross domestic product today, said the figures for the construction sector could be a disaster with falls of as much as 6% between April and June.
The powerhouse services sector – which makes up some three-quarters of the total economy – is also on course to deliver a disappointing result following a series of weak surveys suggesting retailers failed to get a significant uplift from the Jubilee.
Meanwhile, fears over the eurozone deepened with Spain paying the second-highest yield on short-term debt since the birth of the euro, reflecting a growing belief the country will need a full sovereign bailout.
The eurozone as a whole is now subsiding into recession. Business surveys showed the currency area's private sector shrank for a sixth month in July. The downturn that began with the eurozone's high debtors is now becoming entrenched in Germany and France.
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