Britain's official statistics agency confirmed that the economy declined by 0.3 percent in the final quarter of 2012, in its final estimate of GDP for the three month period.

The decline raised fears of a triple-dip recession, though many economists think the country will narrowly avoid a third slump. However, recent snowfall, which is unusual for the time of year, threatens to trump forecasts and drag economic activity down as output is lost and consumer activity freezes.

Office for National Statistics (ONS) data shows business investment fell in the fourth quarter as the US fiscal cliff threat hovered overhead, and the UK's trade deficit worsened. Household consumption rose in the build-up to the festive period.

Business investment dropped by 0.8 percent on the quarter before to £30.9bn, a fall of £250m. This is despite credit easing initiatives designed to free up affordable bank lending for smaller firms so they can invest in expansion and job creation.

The trade deficit grew by £700m to £6bn in the final three months of 2012 as the global slowdown in demand and crisis-gripped Europe left exporters wanting.

Household consumption grew by 0.4 percent in volume terms, spurred by more disposable income as salaries rose at a faster pace in 2012 than the year before.

Britain's powerhouse service sector, which accounts for around three quarters of the economy, saw no growth in the fourth quarter after expanding 1.2 percent in the three months before.

"Though it is not possible to quantify the effect of the Olympics, its effects might be apparent within some sections of the service industries," said the ONS.

"There was a decline of 5.5 percent for the fourth quarter in 'other services' - the industry which contained Olympic & Paralympic ticket sales in the previous quarter. The Olympic ticket sales are estimated to have contributed 0.2 percent to GDP in the third quarter.

"Furthermore, accommodation & food services declined by 2.8 percent in the fourth quarter, following relatively robust growth in the previous two quarters, linked to the Diamond Jubilee in quarter two and the Olympics in quarter three."