The economy contracted at the end of last year, growth numbers are expected to show on Wednesday, pointing towards a mild recession and setting the stage for further stimulus by the Bank of England.
A preliminary estimate of gross domestic product by the Office for National Statistics is forecast to show the economy shrank by 0.1 percent in the three months to December, according to a Reuters poll, after 0.6 percent growth in the previous quarter.
Two quarters of contraction would put Britain within the technical definition of recession.
We judge that output will also decline in both Q1 and Q2, thereby confirming a recession. The better news is that we expect the downturn to be shallow and reasonably short, said Investec economist Philip Shaw.
Britain suffered its deepest recession since post-war records began between the start of Q2 2008 and the end of Q2 2009, with output dropping by 7.1 percent
A new contraction in Q4, meanwhile, will increase criticism of the Conservative-led coalition government's programme of fiscal austerity.
The opposition Labour Party has accused the government of focusing too much on spending cuts rather than boosting growth as a way to reduce record public debt levels, which breached the one trillion pound barrier in December.
The Bank of England forecasts economic stagnation until mid- 2012. And minutes of its January policy meeting - released at the same time as the GDP figures - will test the market's bet that it is likely to approve a further 50 billion pounds of money printing, quantitative easing next month.
Even if service sector and industrial output picked up in December - as the closely watched Markit/CIPS Purchasing Managers' Index (PMI) data suggest - most economists doubt this will be enough to lift GDP for the fourth quarter overall.
But while sluggish growth in the dominant services sector was probably not enough to offset a slump in industrial output and construction, some economists do see a chance of a positive surprise after retailers reported strong Christmas sales.
(Reporting by David Milliken)