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The official GDP figures have revealed that the economy in Britain shrank by 0.2% in the final quarter of 2011.

This is the first time in 12 months that there has been a contraction and although experts expected the results to be below par, a shrinkage of just 0.1% was predicted.

The contraction is in sharp contrast to the results for the previous quarter, where GDP expanded by 0.6% and supports the view of the doom-merchants who have warned the UK will be back in a recession by the coming spring. Overall for 2011, the economy expanded by 0.9%, which may be viewed as a success until it is compared with the full results for 2010, when a 2.1% increase was recorded.

A recession officially occurs when two consecutive quarters show a contraction in the economy, so the pressure is on the government to reverse the trend seen in the last three months.

The contraction in the final quarter was partially driven by the unseasonably warm weather, with gas and electricity falling by 4.1% as less people switched on their heating. Manufacturing was also lower by 0.9% and construction was down by 0.5%.

The results are likely to lead to renewed doubt over the government’s austerity scheme, with ministers doubly under pressure as unemployment reached a 17 year peak.

The Chancellor, George Osborne, denied the results were a surprise and said the figures would not deter the government from pursuing their tough regime. Mr Osborne admitted the result was ‘disappointing’ but insisted they were ‘not unexpected’ and were a legacy from a ‘debt built up over 10 years.’ He also pointed to the crisis in the eurozone as hampering UK growth prospects.

The GDP results come just 24 hours after it was announced that Britain’s public debt has rocketed above £1 trillion for the first time ever. The figure means that there is a debt equivalent to £16,400 on every single individual in the UK and was reached, despite the government achieving a larger drop in borrowing than budgeted during December.

A spokesman for the Treasury said ministers were not panicking about the amount of debt Britain is slowly drowning under and said that it simply showed why the austerity measures were ‘critical’ for recovery. The spokesman added that the amount of borrowing proved that spending in recent years had hit ‘unsustainable’ levels and the fallout was now being seen.

The new level of outstanding finance means the UK have the dubious honour of belonging to an elite club which measures its debt by the trillions – a group which includes Italy, Japan and the US.

Despite seeing debt levels soar, the government is close to achieving their target of reducing borrowing to £127 billion in the fiscal year. Between April and December, the coalition borrowed £103.3 billion – a drop of £11.3 billion compared to 12 months before.

But even though the government is on track to slash borrowing, the news may not be enough to avert a recession, as critics claim ministers are too focused on debt and are not doing enough to stimulate growth.

This concern has led to speculation that the Bank of England may decide to up the amount of quantitative easing when the Monetary Policy Committee meet next month, a move which the Bank of England boss, Sir Mervyn King, has been under pressure to consider for some time. After the new debt levels were revealed, Sir Mervyn admitted that the UK is facing an ‘arduous, long and even’ path before it regains it financial equilibrium.

The International Monetary Fund also waded into the debate, slashing the forecast for the UK to just 0.6% for 2012. But despite the downgrade, the IMF still believe Britain will outperform both France and Germany in the coming months.

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