Britain officially plunged into recession as Goverment figures confirmed that the economy shrank by 1.5 per cent in the final quarter of 2008.

This followed a drop of 0.6 per cent in the prevous three months.

Recession is defined in the UK as two successive quarters of negative growth.

Many experts already knew the country was in recession after a stream of poor economic indicators.

Andrew Aves, regional organiser for the Federation of Small Businesses in Kent and Medway, said confirmation of recession had been expected.

The FSB’s business barometer late last year showed confidence falling to 49 per cent, a clear sign that things were getting bad. "More people expected it to be down than up and it’s no surprise," he said.

But some businesses in Kent were doing well depite the recession. Things would not improve until the banks began lending more to small businesses. At the moment there was a contrast between what banks were saying about lending and what was actually happening on the ground.

"My own personal view that this recession will be quite a long one. I’m pretty sure it will last into next year. Access to funding and the squeeze being put on consumers will mean that things are not going to turn around very quickly and not in 2009."

Signs of recession have been evident for some months.

Unemployment has soared to 1.92m nationally - up 131,000 over the previous quarter - and rose by more than 2,600 to 24,797 in Kent and Medway.

Several retailers have gone into administration, with Woolworths and MFI disappearing from our high streets.

Car sales have plunged by 30 per cent and car production by around 50 per cent.

The Office for National Statistics said the increased rate of decline in Gross Domestic Product (GDP) was due to weaker services and manufacturing output.

Construction output fell by 1.1 per cent, compared with a decrease of 0.2 per cent in the previous quarter.

Total production output weakened further in the fourth quarter, decreasing by 3.9 per cent (1.4 per cent).

Manufacturing output made the largest contribution to the slowdown, falling by 4.6 per cent (1.6 per cent).

Mining and quarrying fell by 1.6 per cent (1.1 per cent), with electricity, gas and water output decreasing by 0.2 per cent (0.6 per cent).

Services output weakened by 1.0 per cent (0.5 per cent), while distribution, hotels and restaurantsfell 2.4 per cent (2.1 per cent).