Britain did not suffer a double-dip recession early last year as previously thought.

But household living standards suffered their biggest drop in a generation at the start of 2013.

The Office for National Statistics said today that after a major annual revision of historic economic data, figures now showed that output flat-lined in the first three months of 2012 rather than contracting.

This meant Britain did not suffer the two consecutive quarters of contraction which commonly define a recession.

However, other figures from the ONS were almost unremittingly grim.

Britons' real disposable income fell by 1.7% in the first three months of 2013, the biggest quarterly drop since 1987, driven down by an outright fall in wages and rising prices, causing households to reduce their savings to the lowest share of income since early 2009.

Britain's current account deficit with the rest of the world unexpectedly widened to 3.6% of gross domestic product and business investment slumped by 16.5% on the year, casting doubt on government hopes for an economic recovery driven by exports and capital spending.

Chris Williamson, an analyst at financial information company Markit, says the revision is a reminder that all data should be taken with a grain of salt - not only when first released but for years after.

Further historic revisions now also show that the recession between the second quarter of 2008 and the second quarter of 2009 inclusive was deeper than thought, leading to a 7.2% fall in output, compared with previous estimates of a 6.3% fall. Britain's slowest economic recovery on record since then means that output is still 3.9% below its pre-recession peak - compared with an earlier estimate of 2.6% below.

The one figure that was not revised was the estimate of 0.3% quarterly growth in the first three months of 2013, a figure that surprised many economists who had been fearing a 'triple-dip' recession before it first came out in April.

Other recent data and surveys have also pointed to a strengthening of growth in the second quarter, with the Bank of England forecasting a 0.5% expansion.

However, the economy remains fragile and many economists expect the central bank to restart its quantitative easing asset purchases of provide other stimulus soon after former Canadian central bank chief takes Mark Carney takes over from governor Mervyn King on July 1.