THE UK is in the middle of a “significant recession,” Rishi Sunak has suggested, after the economy shrank by a record 5.8 per cent in March due to the coronavirus.

The Chancellor pointed out how a recession was technically defined as two quarters of decline in GDP. The Office for National Statistics recorded that in Q1 the fall-off in output was 2%; estimates for Q2 point to a far larger slump in output of around 25 per cent.

Mr Sunak, referring to the fall in GDP between January and March, told the BBC: “We've seen one here with only a few days of impact from the virus, so it is now very likely that the UK economy will face a significant recession this year and we are in the middle of that as we speak."

The latest ONS numbers show the first direct effect of the Covid-19 pandemic on the UK economy after the country was placed in lockdown to control the spread of the virus.

However, with the lockdown only coming into place on March 23, the second quarter will show the full extent of the hit to the economy after the UK ground to a standstill.

Earlier, the Chancellor made clear that it was "no surprise" the pandemic had made a severe impact on the UK economy.

He told Sky News: “In common with pretty much every other economy around the world we’re facing severe impact from the coronavirus. You’re seeing that in the numbers. That’s why we’ve taken the unprecedented action that we have to support people’s jobs, their incomes and livelihoods at this time, and support businesses, so we can get through this period of severe disruption and emerge stronger on the other side.”

Jonathan Athow, deputy national statistician for economic statistics at the ONS, said: "With the arrival of the pandemic, nearly every aspect of the economy was hit in March, dragging growth to a record monthly fall.

"Services and construction saw record declines on the month with education, car sales and restaurants all falling substantially."

He added: "The pandemic also hit trade globally, with UK imports and exports falling over the last couple of months, including a notable drop in imports from China."

The March fall is the worst since records began in 1997, while the first quarter drop is the biggest since the UK economy contracted by 2.1% between October and December in 2008 in the recession that followed the financial crisis.

It also compares with zero growth in the final three months of 2019.

But the ONS cautioned there was more uncertainty than normal over its first GDP estimate, given the challenges of collecting economic data amid the lockdown.

And there is far worse pain to come, with the Bank of England last week warning coronavirus could see the economy plunge by a further 25% in the second quarter and fall by 14% overall in 2020; the worst annual fall since records began.

The Bank also said Britain's unemployment rate could hit 9% between April and June as the lockdown batters firms across the economy.

The Resolution Foundation think-tank warned that the first quarter drop was an "ominous sign of things to come".

James Smith, its Research Director, said: "The lockdown was only in place for seven working days in the first three months of the year.

"But it was still enough to bring about the biggest quarterly economic contraction since the peak of the financial crisis and the weakest single-month change on record.

"With the country in full or partial lockdown well into the second half of the year, the grim economic milestones hit in the latest data will be shattered next time around."

The ONS figures showed all sectors were hammered in the first quarter, with a 1.9% drop in services output marking the largest quarterly fall on record.

Production output also fell by 2.1% in the first quarter, driven by declines in manufacturing, while construction output dropped by 2.6%.