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The ONS said business investment declined 3.9% in the October to December period compared with the third quarter of the year and fell 7.7% from the fourth quarter of 2007. The business investment numbers frequently see significant revisions.

The data were far weaker than in the third quarter, for which figures were revised. Business investment between July and September of last year fell 2.1% on the quarter and 1.8% in year-on-year terms.

That compares with a previous estimates which showed business investment fell 1.3% in the third quarter and was down 0.1% from the year earlier period.

The quarterly decline in business investment between October and December was the largest since the first quarter of 2003. The 7.7% annual decline was the largest since the third quarter of 1991, the last time the U.K. was in recession.

The dive in business investment will likely prove a further drag on already declining gross domestic product data.

Fourth-quarter GDP was initially reported to have contracted 1.5%. Revised data is due Wednesday.

Howard Archer, chief U.K. and European economist at IHS Global Insight, said he expects business investment to decline some 12% in 2009.

"(The) sharp contraction in business investment in the fourth quarter...highlights the need for the government and the Bank of England to step up their efforts in making more credit available for companies," Archer said.