Business
The contraction was much bigger than expected and follows a 0.3% drop in the first three months of the year.
The Office for National Statistics said the fall was largely due to a sharp slowdown in the construction sector.
It said it was not yet sure of the size of the effect of the poor weather and the extra June bank holiday.
This means that these figures, which are the first estimate for what happened in the economy between April and June, are more uncertain than usual.
"The bottom line from all this is that the underlying performance of the economy was probably somewhat better than the headline figure of -0.7% would suggest, having regard to the extra bank holiday and to the poor weather," said Joe Grice from the ONS.
"How much that effect might be is something we won't be able to say or to quantify until we have further experience against which to judge."
The figures could be revised in the coming months as more information comes in. The first estimate is largely based on information the first two months of the three-month period.
"Nevertheless, the overall picture is of an economy that remains fragile,"the ONS said in its latest analysis of the economy.
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UK GDP growth, quarter on previous quarter%Source: ONS-0.7%20082009201020112012-3.0-2.5-2.0-1.5-1.0-0.50.00.51.01.5
Prime Minister David Cameron said the figures were disappointing: "They show the extent of the economic difficulties that we're grappling with, not least the situation right across the eurozone where our neighbours are also really struggling.
"Clearly we've got to keep doing everything we can to get out of this difficult situation and provide the growth and jobs that our people and our economy needs."
Chancellor George Osborne said the country faced "big challenges".
"But given what's happening in the world, we need a relentless focus on the economy and recent announcements on infrastructure and lending show that's exactly what we're doing," he said.
