Official data has shown that Britain's economy has fallen back into a technical recession in the first quarter of the year.
The economy declined by 0.2 per cent from January to March, which occurred after a 0.3 per cent dip in the last quarter of 2011, which provides two successive quarters of a decline in output.
The British Retail Consortium (BRC) has warned that temporary bright spots, such as last month’s retail sales figures, cannot disguise the fundamental difficulties currently being faced by UK consumers and businesses.
With inflation growing at almost three times the rate of average wage increases and budgets under pressure from high fuel and utility bills, the BRC says consumers have continued to cut back on many areas of spending.
British Retail Consortium director general, Stephen Robertson, commented: "2012 looks like being tougher than we thought. The figures are subject to revision but the UK’s return to a technical recession is a blow.
"Whether GDP growth is just above or just below zero doesn’t change the harsh realities facing customers but it will undermine confidence at a time when we desperately need to be going forward not backwards.
"Sunshine helped the retail sector in March and left these GDP figures less negative than they would have been but that cannot disguise the fundamental difficulties faced by households and businesses.
"Consumers are struggling to balance their budgets. We won’t see a convincing revival until real wage growth returns but last month’s increase in inflation suggests the squeeze on disposable incomes will continue.
"If it’s to rekindle recovery the Government must deliver a credible growth strategy. It should halt its tsunami of destructive new regulations and taxes. They are adding costs to individuals and households and can only prolong this new recession.”