According to data from The Office for National Statistics, the economy remained unchanged during the second quarter. Previous forecasts had estimated a 0.2 per cent increase.
The figures end 63 consecutive quarters of growth in the UK, including a 1.4 per cent increase during the same period last year, and add to the likelihood of a cut in interest rates.
Capital Economics chief European economist Jonathan Loynes said: “We will see rates dropping as far as 3.5 per cent, if not further next year.”
Household spending fell 0.1 per cent and the services sector, the UK's main source of revenue, grew just 0.2 per cent.
Loynes said: “Both household spending and investment are likely to weaken much further in response to the continued downturn in the housing market.”
The UK economy will officially be in recession if growth shrinks for two consecutive quarters. “The figures are very weak and suggest the UK economy is already in recession,” said Deutsche Bank economist George Buckley.