The UK hits a Recession

The news came as the latest Office of National Statistics retail sales data showed a 0.8 per cent fall in non-seasonally adjusted value in December – the biggest fall since records began in 1986.

That means we are already in a recession deeper than that of the early 1990s, when the most the economy shrank in a single quarter was 1.2pc. There are a number of definitions of a recession, but the most commonly used one is when there are two quarters in a row of economic contraction, or negative growth.

Unemployment is accelerating sharply, with 1.92 million people now out of work, the housing market remains severely depressed and retail sales are weak. Even though December's retail figures were better than expected, growing by 1.6%, this was driven by heavy price-discounting.

How long this recession stays, and whether it overtakes the 1980s in terms of depth, is less certain.