Britain's recession deeper than thought

The Office for National Statistics left its earlier estimate of first-quarter growth unrevised at 0.3 percent, giving an unchanged annual decline of 0.2 percent.

Britain faces mixed prospects for the second quarter, after data released at the same time showed that services output contracted 0.3 percent in April, the biggest fall since January.

During the first quarter, the biggest rise in government spending since Q4 2008 added 0.4 percent to GDP growth, alongside a 0.9 percent contribution from gross capital formation, which helped offset a drag of 0.9 percent from net trade. Imports rose and exports fell in roughly equal measure.

The figures suggest a major rebound in British exports will be needed to maintain growth when planned government spending cuts take effect from later this year.

"Sterling's depreciation has failed to boost UK economic activity" said James Knightley, economist at ING. "With fiscal austerity being stepped up, and consumer spending growth still falling, there is significant reason for concern over the UK's growth prospects."

The pound fell further against the euro and the dollar after the data was released, and gilt futures pared losses as traders took the view that the data made a Bank of England interest rate rise more distant.

As part of a major annual revision of previous quarters' GDP data, the ONS said that Britain's economy contracted by 6.4 percent between the second quarter of 2008 and the third quarter of 2009, more than the 6.2 percent previously estimated.

The ONS said that was because growth at the start of 2008 had been weaker than first thought, magnifying the size of the subsequent decline.

The resulting fall was the biggest since quarterly records began in 1955 and wiped a total 22 billion pounds off the economy - 2 billion pounds more than previously thought.

The ONS also released first-quarter current account data, which showed that Britain's deficit with the rest of the world widened to 9.628 billion pounds in the last three months of 2009, more than twice as much as expected and compared with a surplus of 521 million pounds in Q4 2009.