The economy ground to a halt between April and June, official figures have shown.

The flat second-quarter performance is the worst for 16 years and worse than the modest 0.2 per cent growth initially estimated by the Office for National Statistics (ONS).

It ends a run of 63 consecutive quarters of growth since April-June 1992, when the UK's gross domestic product shrank.

The gloomy figures will increase fears of recession - defined as two consecutive quarters of negative growth - and shatter Government boasts of continuous economic growth since it came to power in 1997.

Bank of England Governor Mervyn King last week said there was "bound to be a quarter or two" of negative growth as rate-setters balance the threat of economic slowdown with rampant inflation.

The ONS figures also showed household spending declined by 0.1 per cent - the weakest performance in three years.

The figures increase the chances of interest rate cuts from the Bank's Monetary Policy Committee, which has previously been reluctant to slash rates.

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