The threat that the economy is already in the grip of a sharp downturn mounted today as official figures revealed that still-strong growth at the end of last year was built on the shakiest of foundations.

Confirmation that growth in household spending all but ground to a standstill in the final quarter of last year (Q4), reinforced fears that the consumer binge that has fuelled Britain’s growth for more than a decade will now rapidly run out of steam.

Consumer spending in Q4 rose by only meagre 0.2 per cent, less than a third of the pace in the previous three months, and the weakest since the autumn of 2006.

With the final quarter’s business investment also tumbling by 0.5 per cent, total domestic demand - spending across the economy by consumers, companies, and the public sector - eked out a gain of just 0.3 per cent, its weakest for two-and-a-half years.

The UK’s exports also fell by 0.5 per cent in Q4, while growth in industrial output was revised down from 0.3 per cent to 0.1 per cent, close to stagnation.

Today’s official GDP figures confirmed that overall growth in Q4 at a still robust 0.6 per cent, in line with initial estimates. Yet the fragile state of the economy was emphasised as this depended on a massive build-up of stocks on companies’ shelves, the fastest for two decades, and on government spending that is slated to slow sharply from this year.

City economists pointed to the scale of the slowdown in consumer demand revealed by the figures as a further omen that a severe downturn probably lies ahead, perhaps the worst since the last recession in the early Nineties.

“Consumption looks like it hit the wall,” Alan Clarke, of BNP Paribas, said.

The toll from collapsing consumer spending was clear from a spate of figures on the performance of the services sector, the engine room of the economy.

The revised GDP numbers modestly scaled back reported services growth in Q4 to 0.6 per cent, from 0.7 per cent. However estimated growth in the consumer-dependent retail, wholesale, hotels and restaurant sectors was slashed to just 0.1 per cent - a tenth of the 1.0 per cent figure initially estimated.

More up-to-date official figures on the service sector for December alone suggested that it endured a brutal month in which its activity collapsed, with output dropping by 0.5 per cent in its worst performance since June 2002.

December output in the retail and wholesale industries fell by 1.4 per cent, from hotels and restaurants by 1.3 per cent, in transport by 1.2 per cent, in post and telecoms by 2.1 per cent, and in the financial sector by 1.2 per cent, the data showed.

The vulnerability of the economy to a vicious setback since then was underlined by fourth quarter growth having depended so heavily on accumulating stocks, economists cautioned.

The huge £3.1 billion Q4 rise in stocks shown by the official data was the biggest since 1988, and accounted for a fifth of growth in the quarter. Over 2007 as a whole, estimated growth in stocks was the biggest since 1973, according to the estimates.

Analysts said it was all but inevitable that companies would now react by moving to run-down these stocks, taking an axe to production and purchasing, with knock-on consequences for growth.

The fourth quarter’s growth was also flattered by a rare positive contribution from Britain’s overseas trade, which contributed a third of the 0.6 per cent rise in GDP.

However, this offered scant reassurance over prospects as it was driven by a steep 1.2 per cent drop in imports, probably fuelled by the slump in consumer demand, while exports fell by a more modest 0.5 per cent.

“It seems unlikely that trade will continue to offset the slowdown in the domestic economy,” Paul Dales, of Capital Economics said. “Government spending is set to slow, and firms are unlikely to continue building inventories [stocks] once they realise that the economic downturn is unlikely to be short-lived.

“In other words, the areas that drove the economy forward towards the end of last year are unlikely to do so this year.”

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