The first quarter of this year was a time of broad-based economic contraction, spread across businesses and households, that proved far deeper than anyone thought at the time, the official figures revealed on Tuesday.

But more recent indicators, such as the Nationwide house price index, suggest that the economy has stabilised since March. The index on Tuesday showed a rise in house prices of 0.9 per cent in June. Britain’s largest building society believes that house prices rose on a quarterly basis for the first time since December 2007.