Fourth-quarter GDP figures awaited
Fears of a triple-dip recession will mount this week as official figures are expected to confirm the economy slumped into the red at the end of last year.
Friday's figures from the Office for National Statistics (ONS) follow a run of grim economic indicators, with the retail, services and construction sectors all suffering in the final quarter of 2012.
A decline in the last three months would be a sharp reversal of the 0.9% recovery seen in an Olympics-fuelled third quarter. And there are few hopes for the start of this year, with concerns that the snow will compound already difficult conditions for UK firms.
The Ernst & Young ITEM club will on Monday say in its latest report that growth will be anaemic at best this year, forecasting 0.9% in 2013 before gaining momentum in 2014 and 2015 - when GDP is expected to grow by 1.9% and 2.5% respectively.
Peter Spencer, chief economic adviser to the Ernst & Young ITEM Club, pressed policymakers to take a "fresh approach to monetary and fiscal policy", which he said could "open the door to long-term sustainable growth".
The National Institute of Economic and Social Research (NIESR) has already given its gloomy assessment of fourth-quarter performance, predicting a 0.3% contraction at the end of last year.
Investec Securities economist Philip Shaw said he is pencilling in unchanged GDP for the fourth quarter. But he added: "The out-turn looks as if it will be a very close call and there is enough data to suggest that a negative reading is a strong possibility."
Construction has so far been the only bright spot, according to recent industry surveys, with activity surging to a 15-month high in December. However, it only accounts for 10% of the economy and the far bigger services sector has not fared so well.
The Markit/CIPS purchasing managers' index (PMI) survey showed the powerhouse services sector shrank last month for the first time in two years. Overall, the PMI surveys across all major sectors of the economy pointed to a 0.2% contraction in the fourth quarter.