A slump in North Sea oil production, lower factory output and a hangover from the London Olympics caused Britain’s economy to shrink more than expected in late 2012, pushing it perilously close to a “triple-dip” recession.

The Office for National Statistics said Britains gross domestic product fell 0.3 per cent in the fourth quarter – a sharper fall than the 0.1 per cent decline expected by analysts. GDP grew by 0.9 per cent between July and September. Sterling fell to a five-month low against the dollar and to its lowest against the euro in over a year after the data.

“This is a very disappointing out-turn,” said Philip Shaw, economist at Investec. “Markets realise that figures can be revised . . . but clearly now the talk will focus on whether we are in a triple-dip recession.”