Britain's economy contracted by 0.3 percent in the fourth quarter of 2012, according to gross domestic product figures released Friday by the Office for National Statistics.
The contraction exceeded analysts' expectations and contrasted with Britain's 0.9 percent GDP growth rate in the previous quarter, when the country emerged from recession.
Economists fear Britain could fall back into recession for the third time in five years if the economy shrinks again in the first quarter of 2013.
The ONS said Friday that output of goods and services in 2012 was largely unchanged relative to the previous year despite GDP growth in the third quarter, when the economy got a boost from the London Olympics and festivities to mark the 60th anniversary of Queen Elizabeth II's reign.
Industrial production between October and December declined by 1.8 percent, while output in the services sector - which accounts for 75 percent of GDP - was unchanged and the construction sector gained 0.3 percent.
Friday's figures will be reviewed in the coming months but economists are not ruling out another recession, defined as two consecutive quarters of economic contraction.
Experts are forecasting the economy could shrink between January and March due to weakness in production, bad weather and bleak export prospects due to the ongoing eurozone crisis.
Despite the weak economy, ONS data released this week showed that unemployment in Britain fell to 7.7 percent in fourth quarter of 2012, down from 7.8 percent in the previous three-month period and the lowest level in nearly two years. EFE