The downbeat assessment in the Cabinet Office's monthly economic report came as its separate index of consumer sentiment fell to a record low, underscoring the way in which fears about the prospects for the world's second largest economy have spread throughout the population.

The index of consumer confidence among households of two or more people fell to 26.2 points in December, down from 28.4 points the previous month and the worst result since the index was created in 1982.

By adding the word “rapidly” to its assessment of the downturn, the cabinet highlighted the difficulty of finding any reason to hope for a near-term recovery in the economy, which contracted in the second and third quarters of last year and is clearly still mired in recession.