The UK is back in recession after a surprise 0.2% contraction in the economy in the first quarter of the year, official figures revealed.

The decline in gross domestic product (GDP) was driven by the biggest fall in construction output for three years, while the manufacturing sector failed to return to growth, the Office for National Statistics (ONS) said.

An average of 14 town centre shops a day were shut by store chains last year as shoppers increasingly desert high streets for online and out-of-town retailers.

Multiple retailers with six or more shops failed to open as many stores as they closed last year for the first time since 2008, according to a study of the 500 biggest town centres in the UK by PwC and Local Data Company.

The UK is staring down the barrel of another recession after the economy shrank more than expected at the end of last year.

Declines in the manufacturing and construction sectors drove a 0.2% fall in GDP in the final quarter of 2011, according to an initial estimate by the Office for National Statistics (ONS).

George Osborne has been forced to acknowledge a grim picture of declining growth and rising unemployment for the UK over the coming years.

The Chancellor insisted he was still on course to meet his key targets of eliminating the UK's structural deficit within five years and getting national debt on a downward course as a proportion of GDP by 2015/16.

The jobs market is facing a "slow, painful contraction", with firms scaling back decisions on whether to recruit more staff against a background of global economic "turmoil", a new report has warned.

The Chartered Institute of Personnel and Development (CIPD) predicted that the employment situation will get worse for the rest of the year, while medium-term prospects were no better.