The first official confirmation that the UK is in recession came on Friday after figures from the Office for National Statistics showed gross domestic product fell 1.5pc in the final quarter of 2008.

That followed a 0.6pc contraction in the third quarter and two quarters of contraction means we're are technically in recession is here.

The number was significantly worse than the 1.2pc expected by economists, and is the biggest three-month GDP fall since the second quarter of 1980 when it shrank by 1.8pc.

That means we are already in a recession deeper than that of the early 1990s, when the most the economy shrank in a single quarter was 1.2pc.

How long this recession stays, and whether it overtakes the 1980s in terms of depth, is less certain.

The news that we are a nation in recession will come as no surprise, but it will do nothing to quash the uncertainty that is feeding economic decline.

Commenting on the figures, Stephen Gifford, Grant Thornton's chief economist, said: "The sheer fall in GDP is staggering. Financial meltdown has probably been averted but the economy has now entered a recession which is sure to be as bad as the early 80s."

"UK output is likely to fall by more than 2pc in 2009 with the first signs of recovery early next year as interest rates fall close to zero to stimulate the economy and to counter deflation. But the real worry is unemployment, with the number of jobless set to rise to more than 3 million by the end of 2010, it will certainly be a worrying and depressing year for many UK households".

Most forecasters, excluding the Chancellor, are predicting the economy will shrink for at least six successive quarters this time around, starting with the third quarter of 2008. That would make it longer than the recessions in both the early 1980s and the early 1990s, when GDP fell for five consecutive quarters.

There are mixed views on how severe the recession will be, and the goal-posts seem to be shifting on a weekly basis as retailers go to the wall, company profits plunge, unemployment rises, and the housing market stands stubbornly still.

John Cridland, deputy director general of business group the CBI, said: "Until recently we have felt this recession was as bad in scale and duration as the early 1990s, but not as bad as the early 1980s. We've moved beyond that now." However, Mr Cridland said the UK is not yet suffering as much as in the early 1980s, when GDP fell by 6pc peak to trough. He said the economy is likely to shrink more than the 2.5pc peak to trough fall the UK experienced in the last recession.

In contrast think-tank NIESR predicts that this recession will be at least as nasty as the early 1980s, a period characterised by high unemployment as the lifeblood of the British mining community ebbed away in the midst of Thatcherite reforms.

"And, if you want to take a really gloomy view you could go back to the Great Depression," said Martin Weale, NIESR director.

Those who have never worked or even lived through a recession are embarking on a new, rather unpleasant experience. But even those who have lived and worked through times of economic gloom will find the going differs.

"The main difference now is that this is truly global. That is a worry because normally one market pulls up another, but when it is global, everyone suffers," said Mr Cridland. "Often a recession has a heart in one sector and that is buoyed by others. This one started in the construction sector but it has now spread to pretty much all sectors."

Ultimately a crisis that began in the US banking sector and is characterised by a credit squeeze has filtered through to the broader UK economy.

On a slightly more positive note, Mr Weale said that British manufacturers are in a much better position - more robust and efficient - when those famous green shoots start to sprout and the country emerges from recession, than they have been in past downturns.

As the country contends with a recession, it also contends with a weak currency which so far has failed to fulfil its one major benefit: boosting exports. The pound has fallen this week to its lowest level since 1980, the year in which sterling was only prevented from dipping beneath parity against the dollar by the Plaza Accord - an historic G7 meeting on currencies in New York.

Investors have abandoned the pound amid fears that the UK's sovereign rating may face a downgrade, following the Government's second bail-out of the banking sector in only three months.

Merrill Lynch said sterling had now dropped to a level that accounted for Britain losing its flawless credit rating, with strategist Emma Lawson arguing that "the market is now pricing the pound in expectation of a downgrade."

French economic minister Christine Lagarde has urged the Bank of England to intervene to support the currency, but few think such an eventuality is likely.

Sterling marked time against the dollar on Thursday, rising a tenth of a cent to $1.3748, and was half a penny down against the euro, which closed at 94.27 pence. But shortly after the announcement it weakened further against a basket of major currencies.