The Office for National Statistics has announced that GDP shrank by 0.3% in the final three months of 2012, compared with a 0.9% rise in the previous three months.
The announcement could mean the start of another period of recession the UK.
Business leaders at the World Economic Forum cautioned against complacency amid optimism that the eurozone is emerging from its crisis.
The Chancellor blames GDP figures on the crisis he inherited, and troubles abroad. As criticism mounts, his position becomes more difficult.
Unusually frank words for the government from one of the City's top economists on today's dismal GDP figures.