The drop cemented doubt about Chancellor of the Exchequer Alistair Darling's prediction of a 1.6 percent drop made Wednesday, The Times of London reported.
Opposition leaders called the prediction "utter fantasy" the Telegraph reported.
On Friday, James Hughes, chief investment officer at Black Swan Capital, said the British economy was "very clearly in serious, serious trouble."
"Our research suggests that the latter stages of this crisis will be characterized by rapidly escalating inflation and further weakening of sterling, much like the stagflation of the 1970s," Hughes said, calling forecasts in Darling's budget "out of touch."
The International Monetary Fund has predicted the British GDP to contract 4.1 percent in 2009 and by 0.4 percent in 2010.
Colin Ellis, chief economist at Daiwa, said the recent figures "could serve as a rude awakening to anyone who had started dreaming of an eventual recovery."