The UK economy contracted by 0.2 per cent in the final quarter of 2011, the Office for National Statistics said yesterday.

The disappointing fourth-quarter performance represents a strong slowdown on the 0.6 per cent growth in the previous quarter.

Over the course of 2011 as a whole, GDP increased by just 0.9 per cent, much slower than the 2.1 per cent growth in 2010.

It will fuel fears that the UK’s economy is heading for a mild recession, with economists widely expecting further falls in the first quarter of this year as the economy struggles under the austerity measures and the euro zone debt crisis. – (PA)