The sharpest fall in economic output in 28 years on Friday revealed the scale of Britain’s slide into recession, dashing Gordon Brown’s hopes of a swift recovery and fuelling fears of a steep rise in unemployment.

As economists scrambled to cut growth forecasts for this year, Alistair Darling, chancellor, gave the clearest indication yet he would use the Budget to tear up his own forecast of only two months ago that the economy would start to recover in the second half of this year.