The UK narrowly avoided a double dip recession at the end of 2011 and beginning of 2012, according to revised figures from the Office for National Statistics.
However, the recession after the financial crisis was more severe than originally thought.
Gross domestic product (GDP) is now estimated to have plunged by 7.2% immediately after the financial crisis, as opposed to the ONS's previous estimate of 6.3%, following its annual revision of Britain's economic data.
News that the economy didn't contract in the first three months of 2012 will provide some relief to George Osborne, although it didn't grow either. Output remained flat, and the economy is still in a far from robust state. The economy is expected to grow slightly in the first three months of 2013 – the ONS predicts 0.3% compared with the previous quarter, but its year-on-year growth estimate has been halved to 0.3%.
UK disposable income slumped 1.7% in the same quarter – the biggest fall since 1987 – and business investment also fell sharply, by 1.9% quarter-on-quarter to £27.3bn. The steeper 2008/09 recession means the economy is now even further behind its pre-crisis level, says the ONS.
Vicky Redwood, chief UK economist at consultancy Capital Economics, said: "Of course, more relevant are the timelier indications that the economy has continued to gather momentum in the last few weeks.
"However, the detail on first quarter 2013 GDP provides further reason to be cautious about assuming a strong recovery is getting under way."
She added that incoming Bank of England governor Mark Carney may still need to take action to boost the economy after he takes the helm next Monday.
There is slightly better news for the second quarter, with GDP forecasted to grow by 0.5%.