UK economy dropped 2.2% in first three months of 2020 – the largest fall since 1979

When GDP goes up, the economy is generally thought to be doing well so today's figures signal that the economy is doing poorly.

Negative growth often brings with it falling incomes, job cuts and lower consumption.

The economy is in recession when it has two consecutive quarters (ie six months) of negative growth.

Following the global financial crisis that started in 2007, UK GDP fell by 6 per cent.

This marked the deepest recession for 80 years.

The Bank of England (BoE) uses GDP as one of the key indicators when it sets the base interest rate.

This decides how much it will charge banks to lend them money, and is a way to try to control inflation and the economy.

So, for example, if prices are rising too fast, the BoE could increase that rate to try to slow the economy down. But it might hold off if GDP growth is slow.

The BoE cut interest rates twice in March due to coronavirus.

Base rate cuts means mortgage borrowers now typically benefit from lower rates, but at the other end of the scale savers earn less on their savings.

Andrew Wishart, UK economist at Capital Economics, told The Sun the full impact of the crisis on jobs and businesses will only become apparent once the government starts to withdraw its support.

The research firm expects unemployment to double from 4 per cent to 8 per cent, with the same number of companies likely to go bust.

Jeremy Thomson Cook, chief economist at Equals, added: "The falls in GDP are both a sign of what has happened and a signal of what is to come for consumers.

”The former is obvious; Brits aren’t shopping as much due to the fact that most shops were closed in April.

"The signal for the future is that consumption may rebound sharply as things open up, but we expect people to save more of their wages moving forward, cutting consumption in the longer term."