Ananova:

The UK economy shrank by 1.6% in the final quarter of 2008, a bigger fall than first estimated.

The figure - revised lower from the original 1.5% estimate by the Office for National Statistics (ONS) - represents the worst fall in output since April-June 1980.

The slump was driven by a bigger-than-estimated fall in construction and housebuilding, as well as declining output from the UK's services sector.

The 4.9% fall in construction was the worst since 1980 and sharply lower than the ONS's 1.1% initial estimate.

Construction fell by 4.9% - the worst since 1980 and sharply lower than the ONS's 1.1% initial estimate.

There was also a 1% fall in spending by consumers over the quarter - also the biggest drop since 1980.

However, there was a huge jump in the proportion of savings being put aside as people prepare for possible unemployment.

Saving levels soared to 4.8% during the final three months of 2008 - almost treble the amount in the previous quarter.

Although GDP growth over the whole of 2008 was left unchanged at 0.7%, the newly-revised fourth-quarter figures left GDP 2% down year on year and sparked predictions of a 4% decline over the course of 2009.

Capital Economics' Jonathan Loynes said: "The rise in the saving ratio from 1.7% to 4.8% suggests that the required adjustment in households' balance sheets is at least under way.

"But these processes have much further to go and the early signals point to a fall in GDP of a similar magnitude in the first quarter of 2009, putting the economy on track to contract by as much as 4% this year."