The recession in the eurozone deepened at a record rate in the final three months of 2008, partly down to an unexpectedly grim picture in Germany.

Official figures published today said output across the 15-nation single currency zone fell by 1.5% between October and December. It marked the third successive quarter of contraction and the fastest decline since the eurozone was created in 1999. Analysts at Capital Economics said the "recession in the region is deepening at an alarming rate" and forecast a 3% decline this year.

Germany, the biggest economy in Europe, depends heavily on exports and has begun to suffer acutely due to the collapse in global demand. In the most recent quarter, the German economy contracted by 2.1%, the steepest decline since the country was reunified in 1990.

Italy declined by 1.8% and France by 1.2%.

"Today's data wipes out any illusion that the eurozone is getting off lightly in this global downturn," said Jorg Radeke, an economist at the Centre for Economics and Business Research. "Indeed, what has started as a financial market turmoil has long moved to the real economy."

A wider measure of 27 countries, which includes Britain and the eastern European countries that joined the European Union in 2004, also suffered a 1.5% decline in output during the quarter, according to the statistics group, Eurostat. The decline in Europe is now worse than the United States, where the financial crisis began and which reported a 1% contraction in the final quarter of last year.

Howard Archer, an economist at Global Insight, said the decline would further encourage the European Central Bank (ECB) to cut interest rates from 2% to 1.5% at its scheduled meeting next month.

There was official confirmation last month that Britain had entered recession, when government data showed a 1.5% contraction in the economy, the second quarter in a row of declining output.

Steve Barrow at Standard Bank said: "Today's figures show that the eurozone is struggling more than the US at the moment in terms of GDP growth. That is going to continue holding the euro down and keep the ECB focused on lowering rates."