Britain slumps to worst double-dip recession in 50 years after shock GDP figures

Britain slumped to its longest double-dip recession in more than 50 years after figures revealed the economy shrank by a worse-than-expected 0.7% between April and June.

Gross domestic product (GDP) fell for the third quarter in a row and by much more than the 0.2% expected by forecasters, according to the Office for National Statistics (ONS).

ITV News' Business Editor Laura Kuennsberg reports:

See the full interview with the Chancellor George Osborne here.

Today's figures present another challenge to the Coalition Government which has, and continues to, stake its reputation on an economic recovery based on austerity measures.

ITV News' Political Editor Tom Bradby reports on the political fallout:

The dire performance, which represented the biggest quarterly fall since the depths of the financial crisis in the first quarter of 2009, was hindered by an extra bank holiday for the Queen's Diamond Jubilee and the wettest April to June period on record.

The Chancellor George Osborne blamed "deep rooted" problems in the economy:

The grim economic reading will pile further pressure on the Government and fuel criticism that Mr Osborne's austerity measures are choking off the recovery.

The Labour leader Ed Miliband said that the Government's economic policies have "failed" and that families and businesses are paying the price.

Responding to the figures, the former Liberal Democrat spokesman for the Treasury Lord Oakeshott called for a "new A team at the Treasury".

Earlier, he told the BBC's World at One programme that George Osborne was "doing well as a chancellor on work experience” but that he lacked the business experience for the job.

The GDP figure is the first estimate and may be revised in coming months, but it suggests the UK is mired in the longest double-dip recession since quarterly records began in 1955.

Vicky Redwood, chief UK economist at Capital Economics, said there was a possibility that the GDP figures are underestimating the true strength of the economy, but added that it would take "pretty hefty revisions" to cast the economy in a positive light.

The last double-dip recession was in the 1970s, when the economy was hamstrung by soaring oil prices and a miners strike, but that only lasted two quarters.

The UK's economy is 0.3% smaller than when the Coalition came to power in the second quarter of 2010, the ONS figures showed.

The pound fell against the euro as the data increased chances that the Bank of England will pump more emergency money into the economy or drop interest rates further.