Britain's economy unexpectedy sank back into recession in the first quarter of the year, when it contracted by 0.2%.

The data confounded market expectations that gross domestic product (GDP) would expand by a slim 0.1% in the first quarter from January to March, compared with the final quarter of 2011.

The British economy has now returned to a technical recession, defined as two successive quarters of contraction.

It shrank by 0.3% over the previous three months, the Office for National Statistics (ONS) revealed.

The ONS added in a statement that the decline in GDP - the value of all goods and services produced by the economy - was driven by weak construction and manufacturing sectors.

Britain also fell back into another downturn as it struggled with painful government spending cutbacks and fallout from the ongoing debt crisis in the neighbouring euro zone, which is a key trading partner.

Highlighting the extent of Britain's debt strains, official data yesterday showed public sector net debt as a percentage of GDP - excluding the cost of bank bailouts - hit a record high 66% in March.

Britain's total debt stands at £1.022 trillion sterling (€1.25 trillion), the ONS had revealed.

"It's a very tough economic situation," said British finance minister George Osborne in reaction to the recession news today.

"It's taking longer than anyone hoped to recover from the biggest debt crisis of our lifetime - even after the recent fall in unemployment,'' he said.

"But over many years this country built up massive debts, which we are having to pay off. It's made much harder when so much of the rest of Europe is in recession or heading into it," he added.

Britain's economy clawed its way out of a record-length recession in the third quarter of 2009 following a downturn sparked by the global financial crisis but never managed to post a solid recovery.

To help Britain exit its last recession, the Bank of England slashed its main interest rate to the current record-low 0.5% in March 2009, when it also embarked upon Quantitative Easing.

Under QE, the central bank creates new cash that is used to purchase assets such as government and corporate bonds in the hope of boosting lending by retail banks and in turn growing the economy.

The Bank of England has pumped £325 billion sterling into the economy since beginning the stimulus programme more than three years ago.