“THE worst slump since the 1930s Great Depression,” was how one analyst described the UK’s economy as a double-dip recession was confirmed yesterday.

But other economists disagreed, saying a “technical recession” belying the real picture of slow recovery was indicated by the figures, and urged businesses not to lose confidence.

Union bosses and Labour MPs blamed the fallback on the Government’s spending cuts, which saw 20 per cent slashed from many public sector budgets, while Prime Minister David Cameron remained adamant he would not alter course.

In the North-East, some analysts said the region was bucking the national trend of economic gloom with evidence of growth, including the rebirth of steel manufacturing at SSI in Teesside and Nissan at Sunderland winning major contracts.

But others said private companies in the North- East doing well despite the conditions were being let down by the Government.

The official figures, which measure the output of gross domestic product or economic growth, show the economy shrank by 0.2 per cent in the past three months, following a 0.3 per cent contraction at the end of last year.

The figures place the UK into its first double-dip recession since the 1970s, but this second recession is not expected to be as severe as 2008-09, where GDP plummeted by seven per cent.

Mark Firmin, KPMG’s northern head of restructuring, said this year would be one of weak growth at best.

“It’s more serious that output remains broadly unchanged from its level in the third quarter of 2010 and is still some four per cent down from its pre-recession peak, making this slump longer than the 1930s Depression.”

Tom Blenkinsop, Labour MP for Middlesbrough South and East Cleveland, said: “It is proof positive that the views of a Commons committee that the Government has ‘no strategy for leadership and are drifting’ are spot-on.

“George Osborne should now really consider his position in the light of these dreadful figures.”

Kevin Rowan, regional secretary of the Northern TUC said the Government needed to take its cue from the US and start investing.

“George Osborne’s ideological experiment in slashing public spending and investment to try to boost growth has been proven to have failed.”

But North-East Chamber of Commerce (NECC) chief executive James Ramsbotham said the news was disappointing, but anecdotal evidence suggested the region was bucking the trend.

“NECC members don’t reflect the gloomy national picture, particularly in the manufacturing and engineering sectors, which have contracted according to the Government estimate, but emphatically not according to our own members.”

John Cridland, Confederation of British Industry director- general, said: “This disappointing news comes as a surprise. Since the turn of the year, business confidence has improved and, while still challenging, underlying economic conditions also appear to have strengthened.”

Stockton South Conservative MP James Wharton said work to give investors confidence was needed.

“We must talk up our region and its potential, with recent indicators showing unemployment has fallen in the North-East for two months in a row.”

Ted Salmon, Federation of Small Businesses North- East regional chairman, said the region had the resources to propel national growth, adding: “Our region is an asset to the national economy that needs to be supported to achieve its fantastic potential.”